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Photo Credit: David Dennis

I’m excited! My one year anniversary was a bit more than month ago, so I can enroll in my company’s 401(k) program. I’ve been bugging Human Resources to try and get my benefits. I wasn’t pushing for the health insurance since my husband’s plan is cheaper and has better coverage.

When we did our taxes, we were advised to contribute more to retirement. I currently have an IRA and my husband has a 401(k) with his company.

I’ve been bugging Human Resources to try and get my benefits. I wasn’t pushing for the health insurance since my husband’s plan is cheaper and has better coverage.

I’m currently signed up to contribute 5% of my income which is the maximum that the company matches. I want to get as much free money as possible. I’m not allocating a higher percentage yet because I need whatever money I can save going towards paying down the car loan. Once the car loan has been pay then my retirement contributions will increase.

I want to continue on my retirement contributions. They not much in amount but I’m trying to maximize on the power of compound interest (Thanks Ramit!)

There some choices for allocation, but less than what expected from a company this size.

I’ve currently divided it with an aggressive target fund, an index fund of the S&P 500, and an index fund of ‘stable and established’ international companies. Surprisingly those were the only two index funds I saw.  I went with the aggressive target fund because the expense fees were low and it fit my goal of aggressive growth. The other options didn’t appeal to me as many of them had high expense fees and they were did worse on the 5 year average then index funds.

I made sure that I got no load funds. I’m already on a budget, no need to give my money away. How do I know this? Researching on line gave me this information:

It’s a commission that has no real benefit for you. The Fool.com observed:

….that there is no real difference historically between the performance of load funds and no-load funds in terms of year-to-year performance. In fact, according to the latest survey by the mutual fund data analyzer Morningstar, even excluding the drag on returns if the load were included in the calculation, no-load funds actually have a superior record to load funds over the last 3-year and 5-year periods.

This fact is also confirmed on the U.S. Securities and Exchange Commission’s site!

One thing that bothered me was the customer service. The representative was nice and friendly, but did not recommend the best fund for me. She had me birth date and other my account in front of her. Here’s the gist of what happened:

Me: “I’d like to get a target fund for my age.”

CSR: “Ok, ma’am (wow, I’m a ma’am now  J  ), *talking to self* 26…ok we have a target fund for 2020. Would that be fine?”

Me: “*pause* …excuse me did you say 2020?”

CSR: “Yes. Would you like to enroll in it?”

Me:: “No, I’m looking for something more distant and aggressive. I’m 26.”

CSR: “*pause* We have a 2030 and a 2040.”

Me: “I’ll sign up with the 2040 if that’s your most aggressive.”

CSR: “Yes. It is.”

So she was originally thinking of giving a 26 year old a retirement fund set to expire in 12 years. Well, it’s Friday, so maybe she started the weekend early. I know I would if I could. After I got my account set up I went online and tweaked everything in my account.

How is the 401(k) at your jobs? Do they give you options or is it limited? When did you qualify to enroll in it? When did you actually enroll?