Take Control of Your Financial Future
Written: Dec 14 '00
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Product Rating:
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Pros: great research tools, easy to use and understand
Cons: need more choices
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| CultureShock's Full Review: Fidelity Investments 401K Services |
The two smartest financial decisions you can make are to buy a home and to invest in a tax-deferred savings plan. If you think social security (and its 2% return rate) is going to allow you to retire in the lap of luxury you are sorely mistaken. This is why it is so vitally important to take control of your financial future, and investing in a tax-deferred savings plan is about as pain-free as it comes.
My employer utilizes Fidelity Investments for our 401k. Fidelity has an easy-to-use website and a touch-tone phone line to handle transfers, balance inquiries, loan applications, et cetera. I use the website often because it allows me to play with research tools as I make decisions on how to invest my money. I can create scenarios such as if I invested just another $25 a month how that would historically increase my rate of overall return when I am 65.
Since I am over thirty years away from retirement I am considerably more aggressive with my investment allocations, but the important thing is to invest something. Be it investing 3% or 15% of your salary, the important thing is that you are doing something positive for your future. Be as aggressive or as conservative as you feel comfortable.
Once you are signed up, navigating Fidelity’s website is a breeze. First, decide on how you want to invest your money. Your percentage allocation naturally must equal 100. I split my funds between highly aggressive funds and moderately aggressive funds. Bond funds are a viable option for people less willing to take high risk.
I do not micromanage my 401k. A performance check once a month is sufficient for me, and I do not allow myself to freak out if I am having a bad month. Once a year, I sit down and study my funds’ performances over the last twelve months. Fidelity allows you to change your contributions as often as once a day, which I feel is too much. 401k funds are not supposed to encourage day trader behavior.
To transfer funds, you must go through two separate processes. Let’s say that you want to invest 20% of your 100% allocation to the Divers International fund and stop investing that 20% allocation in the Magellan fund. First, you click on the Contributions link and follow the easy steps to start investing 20% of your allocation in the Divers International fund. Done. But if you want to roll over your existing Magellan funds into the Divers International fund you must then click on the Exchanges link. Follow those steps to transfer all of your Magellan funds into Divers International. If you fail to utilize the Exchanges link your existing Magellan funds will remain there. You will no longer contribute further funds to Magellan, but you will continue to make/lose money in Magellan unless you specifically instruct Fidelity to roll those existing funds over. Sounds complicated, but it’s really quite simple. The most important thing to remember is that it is a two-step process.
I wish that Fidelity gave me more funds to choose from. Two or three in each risk category is not sufficient to me.
More choice is the only improvement I would like incorporated in Fidelity’s overall service. I have had to call their customer service line several times and each time I had a responsive and knowledgeable rep. Their website and phone line are both very easy to use. And I love their on-line research tools.
Fidelity has proven to be a great way to manage my tax-deferred investments.
Recommended:
Yes
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Epinions.com ID:
CultureShock
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Location: Nebraska
Reviews written: 68
Trusted by: 19 members
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