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Bye Bye 401k

March 28th, 2007 at 05:16 pm

I look forward to when all my retirement is set up. Well less moving around anyway.

I had a really excellent fund in my old 401k (closed to new investors) and I sold it for Dodge and Cox Intl(new offering) around January. I Was replying to an old thread why you might want to consider keeping an old 401k when the thought occured to me D&C is not a closed one, but likely will be in the future. & to date it is the star of my portfolio for 2007.

I decided it is time to take the plunge and diversify into some more mid and small cap funds. & to buy D&C directly. I had considered it with dh's IRA but found it more prudent to invest in some index funds. Since he wouldn't have a clue to do without me, probably not a bad idea. But with my money, hmmmm. I want to play a little. Plus I really like diversifying between managed funds and index funds - have a little both. So my IRA will be mostly managed, his index. Indexes are great but I don't mind paying a 1% expense ratio for some of these funds that have 20% historic returns. The indexes don't have returns like that.

I am reconsidering the Bruce Fund (Revisiting), a mid-cap fund in Fidelity (easiest to keep some there), and of course Dodge & Cox Intl. None of them but Bruce have fees nearing 1% so don't fret.

A lot of paperwork and fees which annoys me, but I swear I won't be doing this again anytime soon. This is it. Plus if I split it up it will be easy to convert into ROTHs in baby steps. I can't even do it now until this movie thing straightens out - want to see what our taxable income is and if we had a decent windfall might not qualify so have to sit and wait but will save my pennies for when the time is right - probably has to be this year or next before a 2nd income enters the picture again. If no movie money by November may do the ROTH thing. Another $1500 or so but would make us 100% ROTH meaning we could contribute to any of our funds. I can't contribute to any regular IRAs right now. Maybe a small token but won't know until I do my taxes for 2007 - frustrating.

On top of that I have been seeing a lot of favorable stuff about T Rowe and am considering a target retirement fund over there. If I can really just contribute $50/month and no fees that is probably what I Will open late this year or early next year. I can't contribute to my existing IRAs so sounds like a plan.

I am kind of like a kid in a candy store. I just want to try a bit of everything. Was just reading how target funds like that fare well and T Rowe looks like it has some excellent diversification in managed funds at low costs. I was looking at Vanguard Target retirement but it looks like our portfolio as is - mostly holds Total Stock MArket Index. No point to invest in that unless we drop the funds we already have at Vanguard. Would just be a big overlap. So I started poking around and T Rowe really caught my eye.

Well it took me 5 years but I finally closed out my old 401k. Wink

I am embarassed to admit how many funds I will be invested in when all is said and done - too many to count - $4k here and there. But we intend to invest a lot the next few years - I think we have a good solid foundation to build on. Access to Fidelity, Vanguard, T Rowe, plus a couple of the smaller gems out there.

I am excited to invest some of our e-fund in a balanced fund, down the road when we have money to spare, and invest the kids' money (when we have some).

I think I am officially addicted to mutual funds...





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