3 Comments

  • July 22, 2007 - 6:40 pm | Permalink

    There’s a company in Canada that (for our equivalent of the 401K) has funds for different retirement years. You just pick the appropriate year, and they do the allocation for you. You can choose to be more or less risky than your typical age group by choosing a different retirement year.

  • July 23, 2007 - 8:29 am | Permalink

    Yes, I’ve seen those for US-based 401k plans as well, and I know people who use those funds for easy and fast setup. The only caution is to make sure the fee structure isn’t higher than setting up a similar investment mixture yourself. Cost and turnover are two items that I am wary of when choosing funds. Thanks for the tip, it’s yet another way to do a fast account set up.

  • November 29, 2007 - 12:12 am | Permalink

    This is a really great idea. With something like 25 years to retirement, I opened a 401k, which, at the suggestion of a family member (who’s actually a professional financial planner), I mostly parked in bonds, until such time as I was ready to sit down and think through what I really wanted to do… really dumb, cost me about a 15-20% gain that first year. (Not that much money, I suppose, in the end, but probably ~2K, which could in turn have grown that much more over ensuing years…) It was most of a year before I got around to actually allocating the money– which I promptly mostly put in stocks, given my time horizon.

    I’m rather wishing that that first year I’d either done something like what you suggest, or just picked one of the funds where you pick a target retirement date and let Fidelity manage the funds. That’s really probably the best thing to do until such time as you’re ready to plan out something more specific. I intend to pass that advice along to a few younger people of my acquaintance…

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