401k has Target Index Fund, what do I invest in Roth?

#1

Hello Everyone,

New member and just finish the course! I still have a question about retirement and investment. Currently my company offers a 401k option but DOES NOT contributes or matches. My 401k is currently all invested in Fidelity Freedom Index 2050 Fund- Premier Class. I should note that I invest 5% a month of my paycheck which is about $250.00 a month, I am also 35 y/o and just started contributing less than a year ago.

After taking the class, I opened a Roth IRA with Fidelity but I do not know where to start since my 401k is already investing a a Target Index Fund. Do I invest in another Index Fund like, FIPFX, or is that overkill?

Finally, since my company does not match, should I stop contributing to my 401k and use that $250 towards my Roth IRA with addtl money added to get to the $6k a year allowance. Super confused.

Thank you!

#2

Hi Carolina,
Congrats on finishing the course! Welcome to the community :slight_smile:
No it’s not overkill to have target date funds in different accounts. FIPFX would be great! There’s nothing wrong with having all of your portfolio in target date funds.


And to answer your second question about the match, I would follow this list and skip #1. Assuming you don’t have an HSA, yes I would focus on maxing out your Roth IRA first. And if you have money leftover, then come back to the 401k. :slight_smile: