My daughter has just landed her first salaried job as a new RN at age 47.A 401k plan is offered managed by Fidelity. Her company matches half up to 6%. She has asked my advise as to how much and where to invest. Other than SS which she and hubby have contributed to as self employed, they have no retirement plan. I bet they will work past their 60’s.
She knows her mom started work around 40, about 1979, invested in a 403B in TR Price funds for 18 years and has a nice pot now in her 70’s. My daughter knows I have managed these funds for my wife and wants my advice.
I want FReepers’ advise, thank you very much.
She should at least take the 6% match. That is like turning down a raise if she doesn’t. Review the options and stay away from the more risky ones. I have most of mine in large cap growth or large cap value and a the rest in bonds.
1) Make sure that she contributes enough to get the full company match. With tax incentives, she'll almost be doubling her money, instantly.
2) Be sure to pay attention to what fees are charged. 401k statements are getting to be more up front about them, they used to be well-obfuscated.
For instance, My old 401K plan charged fees of almost 2% for a S&P 500 Index fund - a fund that can purchased through (for instance) Vanguard for less than .2%. And, when I asked the plan adminstrator about it ("WHY are you 10 times what you should be for just a simple Index fund???") the reply that I got was: "We can't change anything, that's the most popular fund we offer!"
So, it pays to pay attention. :-)