Any thoughts on T Rowe retirement funds?

Discussion in 'Stocks' started by energizer1, Jan 6, 2012.

  1. Does anyone have opinions on the T. Rowe Price Retirement Funds. I am looking at possibly allocating 100% of my 401k to the 2035 or 2040 fund. As my trading experience is in day trading forex, I don't feel as knowledgable as I should about retirement investing. Seems like the Rowe retirement funds would be a good turn key low maintenance way to build up my 401k. Any advice would be appreciated.
  2. in most 401ks your only choice is what the employer allows you. T. Rowe Price is an excellent mutual fund company, but now days most people that have a choice for instance when they roll over 401ks to self directed IRA's use the much lower expense unmanaged index funds.

    If you are planning on retireing around 2035 or 2040 that is a very good idea. Many people who claimed they got burned on their 401ks didn't have a clue what they were doing. In most cases it was people over 50 years of age who were still 100% in stocks.

    The target funds like you mentioned will automatically reduce risk for you the nearer you get to that target date by reducing stock exposure and adding more bonds.

    For personal money those wouldn't be my first choice, but if you are getting any kind of employer match a 401k is the very best investment tax wise, better than a reg or a roth ira.'

    A target fund is pretty much an invest and forget approach. At retirement you can take a look and then decide if you want to make any changes when you have the option of rolling it over.

    whatever you choose, keep a watchful eye on the expense ratio. no amount of tax deferral can protect you from excessive fees.
  3. Yes, these funds are some of the choices on the menu of my employers 401k. Thanks for the feedback, I am still researching my options.
  4. My daughter (33yo) has T rowe through work, I always have her invest in the most aggresive,riskist gd stuff they offer.

    At one point I wanted all her stuff "out" and into cash which they don't seem to do. They have "cash equivalents" which I haven't been able to find any way to pay a bill with a cash equivalent.

    That being said, I better look and see how she is doing.

    Keep us posted though on your desicion.
  5. It interests me that the 2020 fund means you plan on retiring in 2020, the 2040 fund means you plan to retire 2040, etc. Sounds like it's pretty hands off, if I was gonna actively manage it, doesn't look like a good fund. I am still researching, have a co-worker who used to be an investment manager, may see what he is doing. Thanks for all the input.
  6. you don't have to go all in one fund. For instance,if youare young and want to bee 100% in stocks a typical allocation would be 50% large cap, 20% growth, 10% Science and technology and 20% international growth. Not my reccommendation but typical.

    Usually you can adjust 4 times a year. (Once each quarter)

    If you don't like being long the market there will be something called a cash management account which is just basically a money market

    That's what cracks me up. Cash management is the default, so the people who didn't know what they were doing 401ks did just fine as far as wealth preservation if you ignore inflation.

    It was the people who really didn't know what they were doing but who thought they knew what they were doing and had their whole retirement acccount in whatever fund regardless of risk based on recent performance who saw their 401ks deteriorate when the market went south. They show them on TV crying and someone always tries to blame wall street.
  7. nursebee


    One of the things I hate about the 401K racket is the imposed limitations on what one can invest in. My employer hires a consultant to tell them what to offer for selections, these are then offered through "Fidelity at work". About 2 of the 10 fund selections are changed each year. I have asked to have a brokerage account like option added as someone with Fidelity told me it is an option. On one hand I am kept safe but on the other I lose out on big returns. I wish this option was open to all.

    Sorry to butt in a little off topic
  8. they are not consultants, they are salesmen, and the conversation with the employer is not what's good for you, it's all about what's good for him. But still a 401k is the very best deal, even if the choices are less than optimal. Your day will come soon enough, then you can roll it over into a self directed Roth IRA.
  9. I have a T Rowe Price 401k, most invested in retirement 2020. Overall I'm pretty satisfied. They have quite a few different funds and their expense ratios are low.
  10. bc1


    First off you have to value the separate funds for the periods they represent. I justdid it for our JPMorgan account. The funds line up in a progression of high growth/high risk and then go the other way to low growth/low risk. For the young and new people in the 401K, they start out at a high risk/high growth stock fund. The funds are set up to in order of risk/reward till you get to the point of people about to retire who are basically in a cash/money market fund with low risk and low rewards. Once the account is built up they don't want any big risk stocks in it that might lower it dramatically before retirement.

    So starting out in the 401k, a young person will get a high percentate fo the high risk/high profit speculative stodks, with some diversification in the ohters that are less risky. The older you get the less percentage of growth stocks are use and then you go to the less risky funds as you age.
    #10     Jan 23, 2012