401k Advice

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These are the ones available to my company from Principal. They all suck with unreasonably high ERs (up to 0.9+). The S&P500 large Cap had the lowest at 0.18 so I dumped everything in that.

>>1448748
How long have you had that set up and what are your returns so far?

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>>1448797
Only recently started working there.

>>1448574
You are young enough to go for the 'high growth' choice.

>>1448886
I am 29 years old, so probably not. I am leaning more towards a more balanced portfolio, but it would also require me to contribute around 29% of my income.

Employer will match 50% of my contributions up to 4% of my total yearly income, so not much.

>>1449955
>it would also require me to contribute around 29% of my income.

What

>Employer will match 50% of my contributions up to 4% of my total yearly income

So you only need to contribute 8% to maximize their match. Granted you should probably contribute a little more than that anyway, but 29% seems excessive.

>>1450027
29% assuming I have no savings and I am going to almost completely dependent on this income, I should have specified earlier.

I am thinking about contributing about 10%, but only if I can go with a different plan. My bank has less fees and decent rates, but they will not contribute anything (I will have to double check to make sure).

File: gmo-7-year-asset-class-forecast-(jul2016).png (216KB, 1650x1275px) Image search: [Google]

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>>1449955
>I am 29 years old, so probably not.

You're young enough. The entire idea behind a 401K is that you don't withdraw the money until after you retire, sometime in your sixties. This means you have over 30 years for the markets to work in your favor.

Stock markets, especially U.S. ones, are dangerously high and will likely lead to a poor returns for the next few years. It's up to you if you want to try to play a timing game or not: this is a very difficult environment in which to allocate assets.

If you don't want to play a timing game, I'd recommend you go with a 70%/30% mix of stocks and very high quality bonds. The stocks can be the S&P 500 or some diversified subset that eliminates the crappy companies that are heavily financially engineered. As for the bonds, ideally, you want U.S. Treasuries. You can probably go out on the duration curve, 10+ years, because interest rates are going to stay low for quite a while.

If you've got the guts to sit pat in the event of a market downturn, then go for the emerging markets fund. Emerging markets very likely will give you a much better rate of return than U.S. stocks but the volatility is going to be higher, frightening so if there is a market dislocation. You really have to be certain that you can tolerate maybe a 50% - 60% drawdown and still stay invested to buy into this, though. If such a dislocation occurs, you should continue to contribute to the fund to buy the stocks at lower prices.

Finally, sign up to GMO to that you can access their reports. In particular, keep an eye on the seven-year forecast for various asset classes to help you choose what you want to invest in.

I've posted a screenshot of their most recent forecasts. Note that these are real returns. That is they are returns less an expected rate of inflation. Needless to say, the returns look terrible.