Talk to me about our 401K.

I always take care of the family finances but have just told my husband to invest however he thinks about his 401K. I am certainly no stock genius but he sensed my uneasiness over the last few years and said he put it in more conservative funds. Since the economy looks like it is circling the drain I decided to take a look at the funds he invested in, which are only two. I would like to know your opinion of them. I was kinda surprised to find that there is no financial instrument offered through Vanguard that is FDIC insured.

It is through my husband's company and Vanguard is our only choice. His company matches 25% of our contributions.

https://institutional.vanguard.com/VGApp/iip/Investments?FW_Activity=ProductOverviewActivity&FW_Event=ProductOverviewEvent&FundId=519103&IIP_INF=ZZ519103
https://personal.vanguard.com/VGApp/hnw/FundsSnapshot?FundId=0028&FundIntExt=INT

Thoughts?

of a professional.

those in the industry are not allowed to give advice to people they don't know over the internet. That's a real no-no.

So any advice you get will by definition be from either amatuers or people who are doing what they're not supposed to be doing.

Like the other poster said, professionals must show they've done their due diligence and know their customer. Also there's state licensing requirements to take into account.

PS -- I'm leaving at 4:30 tomorrow morning to do a 401 k presentation.

that I'm in the industry. I was for 18 years and just made a career change. Since my securities licenses are still active, I must be careful about advice I give on the net. How did your 401k presentation go? I've certainly done my share of them. Was it an employee sign-up or were you trying to get a new client?

Just a service call. Come by every six months to tell everyone how the different funds are doing, and signing up new employees.

Routine except for the long drive and early hour.

I am a 401(k) consultant. I'd be happy to tell you my opinion, which would only be worth what you pay for it--nada.

I would need to know:

How old are you and your husband?
Do you both work?
When do you (both) plan on retiring?
How much will you have saved now?
What kind of income do you need in retirement?
How comfortable are you with "normal" market volatility--the stock markets going up some years, down other years?

The info i gave below is readily available from Morningstar and is probably not the info the OP is looking for. Take CSM's advice and converse via PM.

25% match is an odd way to state match. Generally you contribute a percentage from your pre tax income (6% is a good average) (there is a cap) and your employer will match that amount dollar for dollar. This is free money. It does not have to be in company stock, it is just a match.

That money reduces you taxable income as well. So come tax time it may keep you out of a higher bracket.

I would get a clear definition of the match, historical performance of the funds, and speak to an adviser.

Tax accountants tend to be reliable here as they are not trying to sell you something. They will charge you but it is worth paying $150 for solid advice. Do not go to H&R block, find a good cpa who does individual returns.

401k is not a fdic insured account, you can loose money you contribute in a market drop. However a balanced portfolio can return growth over time.

It's 25%.

good experience with my 401K. However my situation may be different. That 25% still reflects a "return" in the match. However there are penalties for early withdrawal, and other very specific rules to be aware of. Some are good, like catch up contributions.

I would find a good cpa and speak to them. A cpa unlike a broker will not try to sell you on something. Much of the detail required to make a good choice, like the poster above noted, is personal financial information.

Properly done a 401K is a great way to invest money and build a retirement.

Company 401(K) plans are not something the average Broker can make a sale on or earn a commission. Unless you pay for the advice, there is nothing a broker can sell you with the exception of the idea of an "In-Service Withdrawal". That's easily avoided. Just say "No thanks".

A Certified Public Accountant might not have the tools or the expertise to determine what is or isnt an appropriate investment choice nor be licensed to give such advice.

As far as the rules for early distributions, etc., the rules for 401(K) plans are almost identical to those for IRA's.
http://www.irs.gov/taxtopics/tc424.html

VWESX - 3 Star (out of 5) rated by Morningstar.
Growth of a $10,000 investment chart; (Assumes all interest payments and capital gains are reinvested. The red line is the fund, the orange the fund category average and the green is the Lehman Brothers Aggregate Bond Index)

http://quicktake.morningstar.com/FundNet/TotalReturns.aspx?Country=USA&Symbol=VWESX
Fairly conservative portfolio of bonds. A little long in duration, perhaps but very conservative;
http://quicktake.morningstar.com/FundNet/Portfolio.aspx?Country=USA&Symbol=VWESX

You'll get around 4.4% yield from this fund for the time being;
http://quicktake.morningstar.com/FundNet/Snapshot.aspx?Country=USA&Symbol=VWESX

The other fund seems to be a classic Money Market fund that is yielding about the same as most other Money Market funds; about 4.5%

If those are the only two, you certainly arent going to go backward too much on principal but the total return numbers will barely keep pace with inflation.

You don't want inflation eating up your nest egg.

eom

but his employer matches 100% up to 8% so unless the whole thing collapses, we will at least get what we put into it.. overall we are up a lot..even with the downturn..

I'm not going to give investment advice, but if you anticipate higher interest rates and a falling dollar, foreign stock funds seem to suggest themselves. Vanguard offers several.

consider
https://personal.vanguard.com/VGApp/hnw/funds/snapshot?FundId=0113&FundIntExt=INT

and
https://personal.vanguard.com/VGApp/hnw/funds/snapshot?FundId=0533&FundIntExt=INT

International bonds might also be indicated, but then there's the added risk that the interest rates in those countries will climb.

I will look at those.

invested in two mutual funds?

If that is the case, I would suggest more diversification, especially into ETFs, or exchange traded funds, that are more specific to sectors, because some sectors will behave better than others during a severe market correction.

The best advice, really, would be to contact an investment advisor you trust.

This market is exceedingly complicated, and I really worry about investors who are trying to make sense of what is going on now. It's not easy to understand all the various factors in motion.

Good luck to you and your husband.