Account Intro: Fidelity 401k


Let’s start off my “Account Intro” series with the largest of them – the good old employer 401k. I’ve been with my current company for more than seven years and have consistently contributed to this account. Rolled over funds of my previous employer’s 401k got this one started. Here’s the run-down:

  • Current contributions: 12% ($160 per week)
  • Employer matches 50% of up to 4% contributions: 2% ($27 per week)
  • TOTAL PER WEEK = $187
  • TOTAL PER YEAR = $9,724

I have this account invested in US, International, and Bond index funds.

401k holdings 11_25_14401k overview 12_1_14

I think it’s funny that I enjoy so many aspects of personal finance, but buying and selling individual stocks is not one of them. I’m just not interested in all of that, so I’ve chosen to follow the advice of Jack Bogle, Jim Collins, Mr. Money Mustache, and many others by investing in low cost index funds whenever possible. I’m a buy-and-hold kind of gal and like the idea of spending considerably less money in fees for overall performance that’s comparable to an account with a bunch of fee-heavy mutual funds (which I used to have). These three funds all have expense ratios less than 0.2%, which makes me happy.

For the time being, I will be keeping my contributions at 12%. I think it might be wise to increase my savings in other accounts that I can access before the US retirement age, since I want the option of getting to it before that should I chose to switch to a lower-paying job I love, or stop working all together. I could put more in my online savings accounts and my Roth IRA than I currently do. Once I get closer to maxing those out, I can bump up the 401K. I do expect a salary increase next Fall and fully expect to put most or all of that to this account. I’m quite far away from the 2015 401K maximum annual contribution limit of $18,000.

Next up: my Vanguard traditional IRA!

(Image: urban_data)

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