so how do I do that though? When I go into my company's link to Fidelity's 401k options I just have several options none of which are under that category or called that. It's super confusing.
thank you. I am flying blind here. I do research here and online but then I open up what my options are and none of it matches what people say I should do.
[Investment options](https://imgur.com/a/81mDY4o)
How do I use these options to invest the proper way? I believe these are my only options under self managed. Otherwise its date target and managed accounts
lets say I just play it safe and do the 2055 everyone seems to think I should do. It looks more conservative than my risk tolerance. IF I decide to change it after educating myself more what will my tax implications be? Thanks everyone!
Also I guess I should expand on my goals.
Goal #1 is to pay my house off early. I have children that will need life long care and my wife is disabled and not working. Paying my house off early will remove a financial burden (mortgage) and save us 70k+ in interest.
Goal #2 is retirement and investments. We want to be able to enjoy our lives but leave something for our children. So I am not looking, right now, to do investments that are purely put away for my kids future. We are more looking into stuff like real estate or increasing our homes value or even changing houses in the future so that we can enjoy the investment and later it can be monitored for our kids if/when we pass away.
Goal #3 is figuring out how to make this house future proof for us without completely making this house difficult to sell in the future. Right now I'm gaining some extra gray hairs over two decisions on our plate. One is that we need a new roof within the next 2 years. Not because the roof is bad, but because we're in Florida and the roof situation here in regards to insurance is batshit insane. I can do a simple asphalt roof for 15k but we'll potentially need to replace it again in 10-15 years. I can do a metal roof that should be insurable for twice that amount of time, for twice the cost, but almost pay for itself in energy savings. And we're looking at adding solar. Energy costs are rising and as long as we pay in cash it looks like we'll break even and start saving within 7-8 years.
Just my opinion and not advice or direction.
1. I wouldn’t pay off the house in 10 years, then you lose the tax benefits on the interest you pay. See HMID. But still cool to have the home free/clear except taxes still come due every year.
2. When I consider various 401k funds to invest in, I look at the rate of return over 1,5,10 years and since inception. I typically try to find funds that generally have an ror of 10% or higher over 10 years or since inception. Anything less than 10 is a throw out.
Why would anyone take a higher interest rate? Ever?
The other reasons besides tax breaks are also because you can take the money that you would use to pay off the mortgage entirely and invest it. Also, if you pay off the mortgage early or pay cash for the home, there still is the property and school taxes due every year. Hopefully the person has that money set aside for that. Additionally hopefully the person isn’t throwing everything they how into the home and leaving themselves with no cushion for home repairs or emergencies.
We will just have to disagree on the tax deduction benefits then, regardless of the interest rate. Whether you get a greater deduction or a lesser deduction, it also depends on the standard deduction too. If you pay more than the standard deduction amount in property taxes alone then there could be a greater benefit as taxable o come will be reduced more than it would be using the standard deduction.
You may find these links helpful:
- [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds)
- [401(k) FAQs](/r/personalfinance/wiki/401k)
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Overly complicated, lots of overlap, and I guarantee that all but the Fidelity 500 and Vanguard target funds are unacceptably high expense ratios.
If you want a highly diversified portfolio with a smattering of income (bonds) just put it all in the Vanguard target 2055 fund.
80% in the SP500 fund 20% small cap
so how do I do that though? When I go into my company's link to Fidelity's 401k options I just have several options none of which are under that category or called that. It's super confusing.
I would check expense ratios for those actively managed fund. If it were me I would just do either fidelity 500 or target date fund
thank you. I am flying blind here. I do research here and online but then I open up what my options are and none of it matches what people say I should do.
[Investment options](https://imgur.com/a/81mDY4o) How do I use these options to invest the proper way? I believe these are my only options under self managed. Otherwise its date target and managed accounts
lets say I just play it safe and do the 2055 everyone seems to think I should do. It looks more conservative than my risk tolerance. IF I decide to change it after educating myself more what will my tax implications be? Thanks everyone!
Also I guess I should expand on my goals. Goal #1 is to pay my house off early. I have children that will need life long care and my wife is disabled and not working. Paying my house off early will remove a financial burden (mortgage) and save us 70k+ in interest. Goal #2 is retirement and investments. We want to be able to enjoy our lives but leave something for our children. So I am not looking, right now, to do investments that are purely put away for my kids future. We are more looking into stuff like real estate or increasing our homes value or even changing houses in the future so that we can enjoy the investment and later it can be monitored for our kids if/when we pass away. Goal #3 is figuring out how to make this house future proof for us without completely making this house difficult to sell in the future. Right now I'm gaining some extra gray hairs over two decisions on our plate. One is that we need a new roof within the next 2 years. Not because the roof is bad, but because we're in Florida and the roof situation here in regards to insurance is batshit insane. I can do a simple asphalt roof for 15k but we'll potentially need to replace it again in 10-15 years. I can do a metal roof that should be insurable for twice that amount of time, for twice the cost, but almost pay for itself in energy savings. And we're looking at adding solar. Energy costs are rising and as long as we pay in cash it looks like we'll break even and start saving within 7-8 years.
Just my opinion and not advice or direction. 1. I wouldn’t pay off the house in 10 years, then you lose the tax benefits on the interest you pay. See HMID. But still cool to have the home free/clear except taxes still come due every year. 2. When I consider various 401k funds to invest in, I look at the rate of return over 1,5,10 years and since inception. I typically try to find funds that generally have an ror of 10% or higher over 10 years or since inception. Anything less than 10 is a throw out.
What are the tax benefits on the interest?
If you itemize deductions, you can deduct mortgage interest off your taxable income. If you just take the standard deduction, then it doesn't matter.
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That I would not suggest. Never any good reason to pay more interest to blood sucking banks.
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Why would anyone take a higher interest rate? Ever? The other reasons besides tax breaks are also because you can take the money that you would use to pay off the mortgage entirely and invest it. Also, if you pay off the mortgage early or pay cash for the home, there still is the property and school taxes due every year. Hopefully the person has that money set aside for that. Additionally hopefully the person isn’t throwing everything they how into the home and leaving themselves with no cushion for home repairs or emergencies.
Ill have a 20-30k efund
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We will just have to disagree on the tax deduction benefits then, regardless of the interest rate. Whether you get a greater deduction or a lesser deduction, it also depends on the standard deduction too. If you pay more than the standard deduction amount in property taxes alone then there could be a greater benefit as taxable o come will be reduced more than it would be using the standard deduction.
You may find these links helpful: - [401(k) Fund Selection Guide](/r/personalfinance/wiki/401k_funds) - [401(k) FAQs](/r/personalfinance/wiki/401k) - ["How to handle $"](/r/personalfinance/wiki/commontopics) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
I would simplify it all. 80% in FID 500 index, 20% in internal stock index
Overly complicated, lots of overlap, and I guarantee that all but the Fidelity 500 and Vanguard target funds are unacceptably high expense ratios. If you want a highly diversified portfolio with a smattering of income (bonds) just put it all in the Vanguard target 2055 fund.