HELP! Need to open a 401K?

Question

HELP! I am about to turn 30 and don't have a 401K or retirement plan. Currently my company doesn't offer a plan. Where do I being? Who has the best offers?

Answer 1

If your company does not offer a 401K, you can open an IRA mutual fund account. The best mutual funds to buy are no-load, low expense funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. If you are like most people, you will invest part of your money aggressively in stock funds, and part conservatively in money market and bond funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial adviser. They will charge you significant commissions, however.

http://www.vanguard.com/VGApp/hnw/planningeducation
http://finance.yahoo.com/funds
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2007/vitindex.html
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
https://flagship.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education

Answer 2

Well, let's see. Your employer would have to offer a 401k so I don't think you can start one on your own.

You can start an IRA or a Roth IRA on your own. I would do some research on line.

Many companies including banks offer IRAs and Roth IRAs. A bank officer might be able to help you.

BUT REMEMBER, many banks don't pay a good return so you might want to consider inter-net banks like INGdirect and HSBCdirect.

Depending upon how much cash you have, you could consider a mutual fund company like Vanguard, Fidelity, or another big one. Some offer plans that if you agree to make regular contributions they'll allow a lower starting balance. INGdirect has mutual funds with low minimum opening balances.

Remember that mutual funds involve some risk. SO you might want to diversify; that means have money in some safe investments like CDs, some in bond funds, and some in mutual funds.

Several mutual fund companies have specific retirement funds aimed at growth now and income later based upon the expected date you'll retire.

The primary thing is to make a plan and stick to it. Put some money away NOW. Your can still contribute to a 2006 IRA until April 15th, 2007!

Answer 3

You can't open a 401k, only your employer can. It's a salary deferral plan.

Get an traditional, deductible IRA. If you can max it out, then also open a Roth-IRA.

As far as who has the best offers, you be best off not taking advice from random people on the internet. Go to any of the large companys that specialize in mutual funds.

Answer 4

Go to a company like Vanguard and open an IRA . They have mutual funds (no load =no cost) to open them. You can save several thousands of earned money per year under an IRA like a stock mutual fund and even open one in a Bond mutual fund if you wish. These are the very same kind of funds that are in 401K's but you work directly with the financial company.

Answer 5

Within 60 days of receiving the check, you need to walk into a bank or brokerage and open the IRA - the bank or brokerage will have the paperwork there - it should take about 10 minutes. Since you are looking for something non-volatile, you can go money market mutual fund (minimal return but very safe) or bond fund (a bit more volatile, but better return). Have the IRA officer explain what choices you have in term,s of conservative investments (a brokerage such as Schwab or Fidelity will have more options than a bank usually).

Answer 6

Depends...if you have 4k that you can contribute immediately then go to Vanguard.com and open up an IRA. If you don't have that much then go down to your local bank and open one up. Then have an automatic deduction set up from your bank account to the IRA so that it's set to contribute each payroll. Set it up so you put in 4k a year.

Depending on your income level...and your ability to save more than 4k a year you will also want to save in a ROTH IRA. Anything over the amount contributed to the traditional IRA would go here. There are minor reasons why a 401k is preferable than an IRA but if one's not available then you take what you can get. And, for the majority of Americans the IRA limit of 4k is more than they contribute to their 401k anyways.

Answer 7

As an insurance agent, I'm telling you start studying. You are entering the complicated world of finance. Take what everyone says with a grain of salt. There are a lot of big name institutions out there. Everyone has their own theory about investing. Keep it diversified but safe. Take a long look at Equity-Indexed Annuities. They came out in the mid 90's and are very popular. Your principal is guaranteed by an insurance company (that's real good) you receive a guaranteed interest (that's real good). You will benefit from gains in one of the indexes (Standard & Poor) and your gains are forever yours (that's good). Your money goes in pre-tax. Good luck.