Reply to how much are you losing, per quarter, on your 401K?

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[quote=Anonymous]I understand some 401(k) the funds or fund mgmt company suck. At one company where I worked, the most productive fund only made the 4% annualized in the 90's early 2K. One thing I have learned from people who have been successful in managing their funds in retirement is that they have taken the money out of the 401(k) and put it into an IRA -either self-managed at Fidelity/TRPrice/etc. or with the advice of a financial planner (either fee for service or pct. of assets managed).  These people stay informed and have more flexibility in the investements and availability of the proceeds.

When I look at the cross section of my mutual funds (including those in TSP (me), 401a/403b (her), IRAs plus a dozen or so stocks/DRIPs) I try to keep at least a good amount in each of the squares in the Morningstar grid (3x3 square small to large cap/value to growth) and a good percent in real estate investment trust fund and a 1/3 to 1/4 in funds with some exposure to or all international stocks. I tend to like value investing, dividends and mid- to small-caps funds/stock (but that is just me.)  Not a real fan of bonds, but recognize their value.

This kind of diversification allows some gains when some are losing, losses when some are gaining -- it doesn't freefall in a market like this. Overall about an annual average of 10% over the majority years of investing (since about 1995). I am still down right now about 8% of value vs. the latest peak. But it has allowed some interesting opportunities like the converting the international stocks funds in my IRA to my Roth IRA since the share price is depressed. Gains will end up being on the Roth side tax free.

If your 401K is really that bad consistently, you may want dive in and calcuate if you can you are better off pulling out of the pretax 401(k) and take the amount as taxed salary and put it into a Roth IRA. That would at least give you an informed option that could be more diversified and closer to your control.[/quote]

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