The Primerica rep we met with recently is coming back tonight and is bringing his manager along.
No, we aren't looking at joining Primerica's MLM force and more than likely won't partner up with them in investments but it can't hurt to pick their brains, I think.
I found the paperwork for the 401(k) through my employer and logged into the website trying to understand just what's being done with my 500 some odd dollar balance. For all that I've read about 401(k) accounts, it might as well be a 578(h) account for the good it does me. Oh, I understand its a shell for investments but I don't understand just what those investments are. Here's some of what the website shows me:
Your Current Asset Allocation
This graph shows you have 51% in Lifecycle/Pre-Mix, and 49% in Company Stock.
Well, that's just hunky dory but what is Lifecycle/Pre-Mix?? Apparently, 51% of the money is in LifePath 2025 Index (yeah, like I know what that is) and the other 49% is in company stock. I googled "Lifepath 2025 Index" and its apparently a fund (mutual fund??) of mixed investments designed for risk reduction as retirement age gets nearer.
The financial engine says that to reduce risk I need to increase the percentage of non-company stock and decrease the company stock amount to 20%. Alrighty, let me just hop on that! They're talking to someone who is just about clueless on this stuff but I'm trying to learn. I know that the LifePath 2025 index is managed by Barclays Global Investors and is a passive fund. Quite a bit of what I've read about them says they're inferior and not recommended but I found a lot of biggies who use the LifePath funds. Perhaps I'd be better off doing something else through Vanguard or another entity but with my lack of knowledge that's very scary to consider.
Grrr, I think I need to talk to the HR person at work. Maybe he can help me make heads and tails of this. If not, he probably knows who can, right? Right???
What if I have money I want to add to this 401(k)? Can I do that? So many questions, so little time! But maybe I can pick the brains of the Primerica guys tonight and see what our Financial Needs Analysis turns up, eh?
Input appreciated, as always. 
It might as well be a 578(h) account!
December 2nd, 2009 at 11:36 pm
December 3rd, 2009 at 01:28 am 1259803713
You're on target with knowing what a lifecycle fund is - it gets more and more conservative in the things it invests in (think bonds) the closer you become to retirement age. The younger a person is the more aggressive or risky it is (think stocks) in the things it invests in.
December 3rd, 2009 at 03:35 am 1259811313
December 3rd, 2009 at 05:17 am 1259817479
1. Take a deep cleansing breath!
2. Remember that you are dealing with 500$ instead of 500K. You have a little time
3. The LifePath 2025 fund is your default and might well be a great place to start. If you are 47, you have about 15-20 years before you retire, so you'll be retiring 2025 - 2030.
4. It appears that BlackRock is also involved in your LifePath fund, which confuses things a bit. I think the ticker symbol for your fund is STLCX. If its not, then you would want to find out your ticker symbol - it makes the research much easier.
4a. If it is the allocation is about 60% stock, 35% bond, 5% cash - in other words, reasonable
http://quote.morningstar.com/fund/f.aspx?Country=USA&Symbol=...
5. Talk to your benefits manager about what funds you can invest in...for ease of administration, your company probably has arranged 10 or so funds as a choice.
6. I would move your bucks out of company stock if you can. If you can't, you can adjust how you invest your new money from your next paychecks. Frankly, I'd move it into the LifePath fund as a first decision - this fund is a fund of funds, so you are diversified amongst stock, bond, and cash already. Then you can move it to something else as learn.
I don't think you can move savings into a 401K because you are then mixing money that hasn't been taxed with money can be taxed right away. But you can move that money into a Roth and put it in a different fund from your LifePath fund so you can diversify that way.
December 3rd, 2009 at 12:55 pm 1259844951
December 3rd, 2009 at 04:15 pm 1259856907