Just enrolled into a 401k retirement plan, have no idea what I am doing. I told them I wanted to contribute 10% of my income- about $20.00 per week- into the fund and the fund chosen was a T Rowe Price 2035 Retirement plan. Any insight and help is appreciated- I don't know what I am doing. My employer will pay in 5% after one year which is a ways off as I am a relatively new hire, I just want to do it right. Thanks-
Three thoughts: 1. Determine what your risk tolerance is and invest in funds accordingly. When you're young, you'll probably want to invest in riskier investments to get higher returns, but it's up to you. 2. 10% sounds great. Try to maintain that level throughout your working career. 3. Don't touch the money until you retire. Some people will accumulate large amounts of money only to withdraw it long before retirement. Don't do that.
I mathematically considered 20% now, 15% when the employer kicks in but that may be too much out of pocket. As far as risk, I am comfortable putting my savings into the hands of people who do it for a living... haven't seen it fail yet. And apart from perhaps buying my son a car years down the road when he's old enough, I see no reason to touch it. I would like to watch it grow.
I don't know anything specific about the T Rowe Price 2035 Retirement plan but it sounds like a lifecycle fund; one that rebalances the fund for you rather than you picking out a whole bunch of differing mutual funds to try to put together a balanced portfolio. If you don't know a lot about investing that's probably a pretty good choice.
