Archived Allocating TGT 401(k)

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Asuras

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Anyone have any recommendations on what to allocate for the 401(k)?

When I orginally set it up (while in college) I didn't thing much of it. So this is what it is now:

3% from each pay period

Lifecycle/Pre-Mix - 19%
Company Stock - 81%
 
Yikes.
That's an awful lot of company stock &, considering how it's been doing, you'll want to consider spreading more into the Lifecycle/Pre-mix.
When you log onto your benefits page, go to your 401K & click the 'automatic rebalancing' tab.
It'll even out your investments so you won't risk losing so much when company stock does a nosedive (which it's done a LOT lately).
 
The automatic re-balance changed it to

Lifecycle/Pre-Mix - 80%
Company Stock - 20%

Does that look better?
 
Much better.
Younger folks may want to be more daring with stocks but after Canada, the credit breach, etc I wouldn't place that much of my holdings in company stock until Cornell evens things out.
Over time, the stock accrual may creep up again unless you set strict parameters but you can give yourself a threshold at which point you can hit rebalance.
 
Some of us briefly did well until 2008... You definitely do not want anywhere near 80% going into company stock. 80/20 sounds like a responsible, and conservative balance. :)
 
I've done 401K ever since I was eligible for benefits at Target and I think it's a waste. I mean what happens if things go to shit? By the time I reach retirement age, social security may not even exist anymore. So are 401K and social security even worth it anymore? Maybe better off just working until you heart literally goes out.
 
Maybe better off just working until you heart literally goes out.
That sounds horrific. I mean.. when you turn 70, do you really still want to be bagging groceries? Or do you want to be enjoying your life, in Florida? That should be a easy one...
I've done 401K ever since I was eligible for benefits at Target and I think it's a waste.
It's not.
I mean what happens if things go to shit?
Which is why you don't go all in on Target stock, and use lifecycle/pre-mixed.
By the time I reach retirement age, social security may not even exist anymore.
So wouldn't it be better to have some sort of investment account, setup???
So are 401K and social security even worth it anymore?
401K Yes. And a Roth IRA.
 
Anyone have any recommendations on what to allocate for the 401(k)?

When I orginally set it up (while in college) I didn't thing much of it. So this is what it is now:

3% from each pay period

Lifecycle/Pre-Mix - 19%
Company Stock - 81%

You should really consider contributing at least 5%. Target matches you dollar for dollar on the first 5%, so if you're contributing less than 5 percent then you are leaving money on the table.
 
You should really consider contributing at least 5%. Target matches you dollar for dollar on the first 5%, so if you're contributing less than 5 percent then you are leaving money on the table.
Yes, and this year, I believe that they will Keep increasing for you until you reach 10% unless you specify otherwise. I went up every year when raise time came. Definitely want to be at least 5% for sure.
 
I do not see this tab anywhere.
Sorry, not really a 'tab'.
When you're looking at Your Investment Strategy, you'll see a pie chart showing Your Current Mix.
Underneath the list, it says "Consider automatic rebalancing to help you maintain your long-term investment strategy." Click on 'automatic rebalancing'.
 
Yes, and this year, I believe that they will Keep increasing for you until you reach 10% unless you specify otherwise. I went up every year when raise time came. Definitely want to be at least 5% for sure.
The 1% increase every year til 10% goes into affect this year. Or is it effect..
 
I don't see "automatic rebalancing" anywhere. _1_Untitled-1.jpg
 
But, is that a good thing? It's been in the red the entire time...
 
Pretty much what mine was when almost half of mine was Target stock.
I don't know; you might want to get some advice from the Financial Engines ('get advice' button above).
 
I'm no stock expert.....

But seeing how the Target stock is dropping more than rising I would steer clear of putting more than 10% in it right now.

Putting in 5% is a good idea if you can afford it since Target matches up to that amount.
 
If anyone is looking at this, there's a fund after you click change my investment where it shows fund performance. You can see how all the options performed this year.

The tl;dr is that the equity and real estate choices are high risk/reward, the lifecycle is low risk/medium reward, bonds are very low risk/low reward, and the target stock should basically never be chosen. In general stock in one company increases your chance at losing everything significantly, but since target has been negative so much you're super high risk and even with good conditions you're likely not actually going to make any money.
 
Thanks, I just got the letter in the mail I can let someone at Hewitt invest my money for me for a nominal fee. I have seen these people screw up retirements/pensions not sure I want to trust them with my 401k lol
 
Thanks, I just got the letter in the mail I can let someone at Hewitt invest my money for me for a nominal fee. I have seen these people screw up retirements/pensions not sure I want to trust them with my 401k lol

The lifecycle funds are partially an index fund, but with some changes to avoid sharp total catastrophe in case of a crash. It's incredibly difficult for an actively managed fund to beat an index fund after fees. I'm not sure how much they want to charge you, but the fee for the lifecycle is .16%. If hewitt wants 1%, or heaven forbid 2-3%, they have to beat the index by the difference in fees just to have made you more money than the lifecycle.

And if they don't, that kills you. A 3% annual fee with the same RoR turns a $400,000 401(k) (2k a year, ~7% growth, starting at age 25 and retiring at age 65) into $178,000. They will have taken more than half your retirement fund.
 
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First, go to the Savings & Retirement tab. Click your Target 401(k) to show your RoR, investment strategy, etc.



Click the arrow button right above where it shows your current mix. A pop up will show "Change Investments" as a link.



Then click fund performance.
 
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