InfiniteImmortality OP t1_j2f638q wrote on December 31, 2022 at 8:34 PM

Reply to comment by [deleted] in What order of investment options should I focus on investing in first? by InfiniteImmortality

I should’ve mentioned this. I currently have 21k sitting in the bank ready to invest roughly 11k keep 10k as an emergency fund when I settle which funds I want to invest in. My income is $1,666 and hope to invest around $1300 a month. This will obviously max out my Roth but I don’t want to put it in a 401k if it’s going to lose me money in the long run and there could’ve been better options. And I’m definitely trying my best to increase my income so I can contribute more in the future but living frugally is all I can do for now.

nkyguy1988 t1_j2f6hyo wrote on December 31, 2022 at 8:37 PM

A 401k by itself doesn't lose, or make you, money. That depends on what you invest in with money inside the 401k. It's effectively the same as an IRA but through work. Working to max out an IRA while hesitant about a 401k is contradictory.

InfiniteImmortality OP t1_j2f74jf wrote on December 31, 2022 at 8:42 PM

I just say that because I don’t trust my financial advisor and it is a actively managed fund and a target date fund of 2065 since I’m 22 but it has the highest expense ratio out of all of them at 0.81 and it doesn’t even outperform the s and p 500 when it shows growth of 10k and I invest in my Roth IRA Vfiax which is purely s and p at a much lower expense rate .04. Should I not even worry and just put whatever I can’t contribute into my Roth into the target date fund?

nkyguy1988 t1_j2f7w7m wrote on December 31, 2022 at 8:48 PM

Then don't use your advisors advice. Is that the only fund options you have? Do you have passive managed funds available to you within the 401k? Not every plan is good, many aren't, and just have high ER funds. Yours could be that. If so, then I would only put in what it takes to get the match then focus on IRA. Only come back to the 401k after the IRA is capped out. Few things outperform the S&P 500 as that's a pretty close measure to the whole market. Not the most inclusive, but close.