I’ve been contributing the max to my 401k for the past couple of years and the returns have honestly been pretty abysmal (~5%). I currently have them invested into 2060 Target investment trusts with Merrill Lynch and Fidelity, but now thinking of switching it up and allocating them to market ETFs. If I do what do y’all suggest? Also curious how everyone else invest their 401ks? YOE: 7 TC: $180k
S&P fuck target funds
Depends what you have offered, but I just try to do any fund that follows S&P. Currently thats VINIX with vanguard since expense ratio is also .035%. I’m not the biggest fan of targeted retirement funds cause I’m young and I have a way higher risk tolerance (not that 100% in S&P is necessarily risky). But basically i dont care to have exposure to bonds and international stocks cause of lower performance. Also check your expense ratio on the fund and compare. Some funds may show higher gains but gave way higher expense ratios.
Index funds yay, target funds boo
People in tech should be more aggressive than target funds because this will not be our only resources for retirement. So target funds are not for us. There are for people whose need for retirement safety are those that could go into poverty if the market goes down. Index funds are usually the way to go. I wouldn't touch bonds until you hit your late 40s.
GME
From 401k , Is there an option to invest in ETFs instead of target funds ?
Depends on your company's plan. Sometimes you have to set up an extended account to trade in funds they don't have pre-selected.
Target funds are useless. If you don't want to bother much then just invest in S&P 500 ETFs like VOO or FXAIX