No, it doesn't offer any target retirement date funds. Also, all the
funds are managed in house (I work for a fortune 100 company, they've
the resource to do that, I guess). But they offer self-directed
accounts thru Charles Schwab. I have put everything in the Stable
Value fund so far (only one month) while I'm getting up to speed on all
the in's and out's of 401k and retirement planning, etc. I'll
definitely reallocate once I feel I know what i'm doing.

The most important factor in your return is the allocation between
stocks and bonds. I would go with 80 or 90% equities because you are
young and agressive.

Within the equities, index funds are fine. I suggest a large cap, a
small cap and an international fund. You might go a little lighter on
the international, say 30-30-20 for a an 80% total in equities.

Here's a way to think about how much money you need to retire. Your
401k savings may well provide the bulk of your retirement income. You
will live 30 years or more after retirement. Studies have shown that 4
or 5% is a reasonable withdrawal rate so the money will last. For
example if you have a 401k worth $500,000, you can draw 5% or $25,000 a
year from it.

A reasonable retirement income is 50% of your final salary. So your
target for savings is to have 10 years (final) salary in the 401k. For
example if you have a final salary of $50,000, you need $500,000 to
withdraw $25,000 per year.

Because of inflation and experience, your final salary will be several
times your current salary. For example with 3% inflation for 30 years,
it will take about 2.5 dollars to buy what 1 dollar buys today. That
makes your savings target equal to roughly 25 times your current annual
income.

I think you will find that your current savings rate plus earnings will
not put enough in your 401k. You need to increase your contributions
above the amount your employer matches. You might increase it 2 to 4%
now and another 2 to 4% in a few years. You won't miss the money and
it will pay off in the long run.

Good luck!
Frank

I like the idea of
- quote -

s o wrote:
- quote -

Does your plan offer any target retirement date funds? If so, that may be
suitable for you to start with for 3-6 months while you come up to speed
on all the funds and make a decision. BTW, what funds have you chosen
for now since your message seemed to imply that you have already started
putting the money into 401k

Hi,

I just got started in my new company's 401(k). I'd like to get your
opinions on how should I allocate my 401 investments. I'm 33, married,
2 small kids, no debt except my mortgage. I'm putting in $480 each
month to get my employer's full 50% match ($240). I've read a few
books on retirement planning and mutual funds and I like the idea of
indexing. average return is good enough for me. I know I should be on
the aggressive side since I'm still 30 plus years away from my formal
retirement age. I'd like to keep my holdings to 4 funds, 5 the max.
Any comments/ideas are greatly appreciated. Thanks.

Here're my company's offerings from safest to most risky:

1. Stable Value fund - tries to match Merrill Lynch 1-3 year treasury
index. Exp ratio = .42%

2. U.S. Fixed Income fund - (mostly mortgage-backed securities + some
corp bond). Tries to match CitiGroup's BIG bond index. Exp ratio =
..21%

3. High yield Bond fund - (mostly corp. bonds). Tries to match Merrill
Lynch High Yield Master II index. exp ratio = 54%

4. International Bond fund - (mostly govmt. bonds of the EU. Japan and
some U.S.). Tries to match CitiGroup World Govmt. Bond Index. exp
ratio = .62%

5. Balance fund - a combination of #1, #2 and #7.

6. Equity index fund - tries to match S&P 500. exp ratio = .05%

7. U.S. Equity Fund - tries to match S&P 500, actively managed. exp
ratio = .27%

8. International Equity Fund - mostly Europe and some Asian markets.
exp ratio = .52%

9. Small Cap Fund - tries to match Russel 2000.

10. Emerging markets Equity Fund - tries to match Morgan Stanley
Capital International Emerging Markets Free Index
Thanks in advance.

s o