Hey, as the title says, I’m 21 and have $20k in my 401k, and it’s all going into one fund—‘JPMorgan Large Cap Growth R6’.
Here are my details:
Is it smart to keep it all in this one fund? Should I split it up? If yes, where should I put the rest? I don’t know much about retirement stuff, so any advice is appreciated.
To summarize what others might say: over one year, with your contribution and company match, you’re adding about $10k. Your fund charges 0.44% in fees. So in three years, you’ll have around $34k, and the fund will have taken about $170 in fees.
There are other funds with lower fees, like 0.03%, which would only take around $15 in the same time. So you’d save some money by picking a lower-fee fund.
Someone mentioned avoiding bonds—probably because they grow slower and have higher fees.
Thanks! This helps a lot. Can you recommend a fund with a low expense ratio?
VOO has a 0.03% fee and usually beats the return of your current fund.
“JPMorgan Large Cap Growth R6” is an actively managed fund, which means someone is choosing which companies to include. These are usually big companies that are expected to grow faster than the general market.
It’s not a bad fund, but having all your money in one fund can be risky. A broad market fund, like an S&P 500 fund, would spread out your risk more. If your 401k offers something that tracks the total market or S&P 500, it’s a safer option for 100% of your portfolio.
Congrats on building up $20k! My advice would be to find a fund with lower fees. The one you’re using has a 0.44% expense ratio. There are cheaper options out there, like Vanguard or Fidelity funds.
What does 0.44% mean? Is it charged on every deposit?
No, it’s charged annually on the total amount you have in the fund.
Right, it’s a yearly fee. So, 0.44% isn’t horrible, but other funds like Vanguard or Fidelity tend to charge much less, and that can save you a lot of money over time.
If I were 21, I’d put my money into the cheapest S&P 500 index fund I could find and let it sit for 40 years. Your current fund has lagged behind the S&P 500 by about 80% over the past 10 years.
Do you have a recommendation for the cheapest and best option? Thanks!
If you’re talking about outside work investments, I like Fidelity’s FXAIX—it has a 0.02% fee. That means for every $1,000 you have, you’d only pay 20 cents a year in fees. Compare that to the $4.40 per $1,000 you’re paying now.
Check what your 401k offers and look for funds with lower fees, but stay away from bonds at your age.
What’s a good lower-fee fund? And can you explain bonds to me like I’m 5?
Your fund has a 0.55% fee. Something like VOO has a 0.03% fee and has performed better in the past 5 years. You can look up these details on Google Finance or Yahoo Finance.
Funds like VOO (S&P 500) or VTI (Total Market) are great options with low fees. Check them out on Yahoo Finance for more info on fees and performance.
It’s smart to diversify for both safety and growth.
Who’s managing your 401k? If it’s Fidelity, they offer a brokerage link that lets you invest in more than just funds. It could give you more control.
It’s managed by Empower Retirement.
You’re doing great with $20k at age 21—most people aren’t that far ahead. Keep at it! Just try to move your money to a low-fee, broad-market fund like VOO if your 401k allows it.