grokfinance t1_iy4c2wv wrote on November 28, 2022 at 5:33 PM

Reply to comment by Lobster_osity in Started saving for retirement this year-- my "historical returns" YTD say -8.97%, why am I putting this money here instead of a high yield savings account? by Lobster_osity

FYI - you didn't say your age but unless you are in your mid to late 50s your "moderate growth" portfolio is likely way too conservative. In your 20s/30s/40s there really isn't any reason not to be 100% stocks. Certainly no cash. Cash would just be sitting there earning probably less than 0.05%. Why? You might feel more comfortable with a more conservative approach, but just realize being too conservative is actually a category of risk onto itself. You need the money growing and compounding to keep pace with inflation.

Lobster_osity OP t1_iy4ch6y wrote on November 28, 2022 at 5:36 PM

Wow, I didn't think about it like that.

I am early 30's.

Maybe I'll talk to my broker about transitioning to a more aggressive approach.

grokfinance t1_iy4d2ta wrote on November 28, 2022 at 5:40 PM

Yeah, early 30s I'd be 100% stocks. I'm skeptical of what this "broker" is doing for you. Likely he/she is just adding fees that you don't need to be paying. Literally all you need to do is select a target date fund that your 401k plan offers or better would be a total stock market index fund. If you don't have either of those two options then an S&P 500 fund. If you are paying any kind of extra fee to this broker then I'd axe that ASAP. Fees, like growth, compound and add up over time. Paying an extra 1% fee over 30 or 40 years will eat up something like 30-40% of your gains over time.

Lobster_osity OP t1_iy4envn wrote on November 28, 2022 at 5:50 PM

Honestly I think he was just hearing and responding to my hesitancy to be aggressive when I first set it up. When I started I wasn't sure how my commissions would go and my emergency savings were slight-- I was afraid I might need to pull out at some point and with market trending downward, my instruction to him was to keep alot of it in cash.

In hindsight, my commissions have been better than expected and I built up my emergency fund and I don't expect any type of early withdrawal even if I lost my job today.

Hey, maybe it's a blessing in disguise-- I can use that cash to purchase more stocks than I could have at the beginning of this year!

Trying to look into the fee schedule right now. This is where my online account sends me when I click fees: https://saf.wellsfargoadvisors.com/emx/dctm/Marketing/Marketing_Materials/Image/e6748.pdf

I have a feeling my employer would be wise enough to not have a crappy one-- it's a small business and the owners are personally invested in the 401(k) as well.