So looking at my 403(b) TSA.....

[TraumaRN]

So I'm 22 years old and going to be setting up my investment/retirement profile with my job today. A little background about it, they will match 3%(though possibly starting in 2008 it'll be 4-5%) I get paid every ever 2 weeks.

I'll be splitting the money into 2 investment funds one is the Vanguard Explorer Fund Admiral, the other is Vanguard 500 Index Fund Admiral, both are medium high risk funds if I recall correctly and at this point I don't need nor want to invest in like 6 different funds.

At this point I really just want to start my retirement fund off and get some initial coinage in the fund so that in a few years when I start having kids and what now I can diversify more put more money into it etc. So what my question boils down to is what should I put into it per pay check. I was figuring about $100 a check, which with the 3% matching would be like $150 per check. So $300 a month for retirement at my tender age of 22.

Is that enough? Somehow I just feel like I'm shortchanging myself.

 

[Safeway]

Put in the max that they match. Put the rest in your own accounts, Normal IRA or Roth IRA.

 

[maddogchen]

put in 5%

 

[alrocky]

You may invest as much as $15,500 in your 403(b) and $4,000 in an IRA this year. You should consider maxing out both or as much as you can afford. Because you get Admiral shares (lower expense ratios) you might want to max that before the IRA. For that and other reasons you should also consider a ROTH IRA over a traditional IRA.

Small Cap Growth:
Vanguard Explorer Fund Admiral Shares (VEXRX) 0.28% ER
Vanguard Explorer Fund Investor Shares (VEXPX) 0.46% ER

Large Cap Blend:
Vanguard 500 Index Fund Admiral Shares (VFIAX) 0.09%ER
Vanguard 500 Index Fund Investor Shares (VFINX) 0.18%ER

I strongly suggest you consider one more fund, an International fund.

 

[Elbryn]

you get cost advantages in the 403b fund over traditional or roth ira. however roth ira uses taxed money which is advantageous if your taxes later on are higher than they are now. i wouldnt consider a traditional ira if you havent maxed your 403b, i'd go roth ira only. i second alrocky's recomendation for an international fund. if you have access to vanguard total stock index and vanguard total international stock index, you have a very simple two fund approach that covers the span of all asset allocations at an extremely low cost.

edit- on the other topic as to how much, i'd put away as much as you can now. assuming you get 7.2% a year, your money doubles every ten years. that means every dollar you put in now is worth eight 30 years from now and 16 40 years from now. you'll gain far far more by saving as much as possible now and then letting up and enjoying more later on. get a solid base together then let the reins loose a bit.

 

[KCfromNC]

Any particular reason you want a small cap growth fund? Typically this asset class has underperformed given the extra risk it adds to the portfolio. If you want to weight towards small and away from the market, consider small cap value or blend funds (extended market index would work here as well).

 

[Yossarian]

admiral shares are sweet! I just transferred my accounts over to Vanguard so it will be a while before I have access to them. I recommend putting the majority of your contribution in the S&P500 index. The Explorer fund is actively managed and has a higher expense ratio. It is still pretty low but at your age, fractions of a percentage will translate into many thousands of dollars by the time you retire. I second the recommendation of buying an international fund if one is available.

300 a month isn't a lot but if you commit to contributing regularly you will have a nice little nest egg. as always I recommend checking out www.diehards.org for some sound investing advice, and reading books like The Bogleheads Guide to Investing and Four Pillars of Investing.

 

[TraumaRN]

Actually I do have access to an international fund, its Causeway International Value Fund - Inv....rated at High Risk...but as some of you mentioned I'm younger so I can afford a bit of a hit right now. And to clarify I just want to get my feet wet this year, as my 403(b) was JUST offered to me a couple weeks ago I don't plan on maxing it out this year. Because I dont think I can afford to do that in 6 months

Should I add in that international fund?

 

[alrocky]

Causeway International Value Inv (CIVVX) 1.15% ER and a Morningstar Pick.

Can you list all the funds available to you, international or otherwise?

 

[TraumaRN]

Originally posted by: alrocky
Causeway International Value Inv (CIVVX) 1.15% ER and a Morningstar Pick.

Can you list all the funds available to you, international or otherwise?

Sure can...

Maxim Aggressive Profile II
Maxim Moderately Aggressive Profile II
Maxim Moderate Profile II
Maxim Moderate Profile II
Maxim Moderately Conservative Profile II
Maxim Conservative Profile II
Causeway International Value Fund-Inv
Pennsylvania Mutual Fund-Inv
Vanguard Explorer Fund Admiral
American Funds Growth Fund R4
Hotchkis & Wiley Large Cap Value -A
Vanguard 500 Index Fund Admiral
American Funds Amer Balanced R4
Lord Abbett Bond-Debenture -A
PIMCO Total Return Fund - Admin
Maxim Money Market Portfolio

There ya go.

 

[Reel]

That is nice that they let you get admiral shares and in the closed explorer fund. I didn't know there was a way to approach it like that. I wish I was baller enough to get some admiral shares.

 

[alrocky]

Originally posted by: DeathBUA

Originally posted by: alrocky
Causeway International Value Inv (CIVVX) 1.15% ER and a Morningstar Pick.

Can you list all the funds available to you, international or otherwise?

Sure can...
Maxim Aggressive Profile II
Maxim Moderately Aggressive Profile II
Maxim Moderate Profile II
Maxim Moderate Profile II
Maxim Moderately Conservative Profile II
Maxim Conservative Profile II
Maxim Money Market Portfolio

CIVVX 1.15% ER FLV - Causeway International Value Fund-Inv - M* Pick
PENNX 0.87% ER SB - Pennsylvania Mutual Fund-Inv
VEXRX 0.28% ER SG - Vanguard Explorer Fund Admiral - M* Pick
AGTHX 0.63% ER LG - American Funds Growth Fund R4
HWLIX 0.98% ER LV - Hotchkis & Wiley Large Cap Value -A
VFIAX 0.09% ER LB - Vanguard 500 Index Fund Admiral
ABALX 0.58% ER balanced - American Funds Amer Balanced R4
LBNDX 0.99% ER bond - Lord Abbett Bond-Debenture -A
PTTAX 0.90% ER bond - PIMCO Total Return Fund - Admin

There ya go.

The two Vanguard funds are excellent choices. CIVVX is the only other fund I'd suggest to fill out your portfolio. (The bond funds are terribly expensive.) With the 3 you'll cover your basic asset allocation of Large Cap, Small Cap and Foreign. (Suggested ratio of ~45:20:35). You could pass on CIVVX for now and instead open a cheaper (lower expense ratio) international fund in an (perhap a ROTH) IRA.