Advice on Fidelity 401k investments?

Question

Advice on Fidelity 401k investments?

I'm 22 y/o and have only ~$960 in my new Fidelity 401k (which I'm not familiar with it at all).I am going to start putting 6% from my paycheck. I will be talking to my manager on Monday. Is there any specific questions that I should ask? Any advice is appreciated.

FYI, this is my current approx investment %:

68.71% FID FREEDOM 2040

31.29% FID FREEDOM 2050

Answer 1

You are currently invested in "life cycle" funds.  These are actually a good choice for people who do not understand investing enough to feel comfortable with setting up a balanced portfolio by themselves.  Most people pick one target level, such as 2040, but having money in more than one doesn't hurt either.

Answer 2

You should probably just put it all in the 2050 fund, since you won't be eligible to withdraw it without penalty before 2051 anyway.  The 2040 fund starts being far more conservative than you need to be ten years before you need it to!

And since you are 22, you should be proud you already have "only ~$960", since most people your age haven't even started saving.  That $960 will grow to somewhere between $21,000 and $180,000 by the time you retire!  If your salary is $20,000 and you defer 6% (even if you never get a raise), it will grow to at least a million and a half.  

Congratulations!

Answer 3

Be as aggressive as possible. Don't go the safe route by investing in a fixed or guarranteed account. Your young and should be in stocks. When you start a family and get older, you can start peeling some back to more conservative allocations