Archived 401k + Investment

[chinacat]

This may be a stupid question, but if anyone can explain to me what this means I would appreciate it greatly...

I recently signed up for a 401k with Target and it said I was also investing 100% into something called Life something? I’m pretty young and new to all of this retirement stuff, I just figured I’d get my 401k set up now instead of later.

What did I invest in? I didn’t voluntarily opt to invest in anything.

 

[GoodyNN]

Your 401k is the investment mechanism. You are redirecting a portion of your current income into an investment account for future needs. The Life something is probably the name of the specific portfolio your money is going to.

 

[Black Sheep 214]

You can get more information from Target Team Member Services. Try the website targetpayandbenefits.com or you can call them with questions. You can find out all of the investment choices from them. I am guessing that the “Life something “is the default investment choice if you haven’t chosen anything yet, but check with them for the definitive answer. Your HR may be able to help you, also. Congratulations on starting to save for retirement early. Smart move! Really smart!😁

 

[Yetive]

Good job starting early. I imagine it is one of the investment options, Lifecycle/pre mix or LifePath index funds. I would definitely go to the benefits site and look around. There is a lot of information there about finances--not only 401k.

 

[wiredharpoon]

Sorry for the late bump. Life = Life Path Index (at least I think that's what its called). Basically you choose the plan closest to your retirement age and it adjusts every year.. set it and forget it. Most young people can throw money into stocks that can have a lot of ups and downs (last year I think I had a 16% return on investment). When you start to get closer to retirement, having 100% of your retirement money in volatile stocks could end up costing you everything if the market tanks. By picking the Life Path Index, it starts you off with a larger percentage into higher return stocks and eventually transitions your funds to bonds.

Stocks can have average gains/losses of 5%-20%. Bonds have a steady gain of 1%-4%. When you are dealing with 800k-1m in funds around retirement, bonds are a safe bet with a steady return.

 

[Poofresh]

i have had this for the past 7-8 years ive been with target. great way to start your retirement really. i dont trust myself with my own money. this year, I was able to buy a small condo home because of 401K loan. Now I am no longer an apartment dweller and a home owner. Thanks to Target and their 401k.

 

[buliSBI]

Your 401k contributions are put into mutual funds and stocks depending the percentage of your allocations. Depending their performance, you can increase funds and interest. Some people rather use the services that match your contributions and allocations to your retirement goals. Some people change their allocations depending on each of their allocations' performance. You can either do low risk, low return/loss investments or do high risk, high return/loss investments.

Or you can pay an investment broker or service do the work for you.

FYI-
1. If you ever leave Target, you will need to move your 401k funds. Always rollover to another eligible account. Never cash out.
2. You can use your 401k funds for certain needs penalty free or pay back for within an allotted time. Buying a house or education....
3. Never use your 401k to supplement your income. Heavy penalties and fees.