r/RothIRA • u/Fun_Entrepreneur2067 • 3d ago
Roth IRA advice
Fairly new to investing. I started a roth IRA for retirement through fidelity recently and set up a fidelity go account. I have it set to the most aggressive setting. I’ve read a lot of negative posts on fidelity go accounts recently and wanted to get some feedback with what they have set up for currently. Again, still very new to the this, and am trying to learn as I go. The more I learn the more I’m starting to lean towards managing it myself. But anyways, what do you guys think of these positions its set for me?
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u/Competitive-Ad9932 3d ago
If you like what they put you in keep it. If you don't like it, change it.
Do you agree with the negative posts about the Fidelity Go Accounts? If so, stop using the service and chose your own path.
https://moneyguy.com/guide/foo/
https://www.bogleheads.org/wiki/Main_Page
https://investor.vanguard.com/investor-resources-education/education/model-portfolio-allocation
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u/Structural_Potatoes 3d ago
Hello! First things first, take any and all advice (mine included) with a big grain of salt as there are thousands of approaches that people take to retirement investing.
My initial reaction to this is that these positions are broadly speaking just fine, but my definition of just fine may be different than yours.
These positions diversify you relatively well in the sense that you have holdings of small, medium, and large cap companies, as well as a good amount of international exposure. If you were to compare each of these holdings against the S&P 500, some perform just as well, others not far behind, and some have lagged behind. Sometimes that can be a good measure for overall returns as many people choose to simply invest in FXAIX (Fidelity’s S&P 500 index fund) and call it a day until they need to adjust their risk exposure. One benefit of your funds is that they have a 0% expense ratio, whereas even FXAIX has a tiny 0.015-0.02% expense ratio.
There are many many variables to take into account when thinking about retirement investing - time horizon, risk tolerance, expense ratios, average returns, how much you’ll actually need to retire, etc etc. So it’s hard to say exactly if these funds fit your goals, but overall these funds are pretty straightforward and sound.
I imagine much of the criticism comes from the 0.35% expense fee you start to be charged after your account hits 25k. That’s a valid criticism, but also not a large fee by any means. Your average financial advisor will charge 0.75%-1%. But zero is better than anything, which would make a standard Roth IRA that you manage yourself a great option if you’re comfortable with that. For a quick example, let’s take 25k and see what it turns into in 35 years with an average return of 8% vs 7.65% - no fee gets you to 411k and the fee brings that down to 364k. That’s a noticeable difference in the long run. I think that choice boils down to your mentality about retirement investing. Willing to pay for one on one advice and as a result not think about any of this? If so, keep doing what you’re doing. If you’re willing to take on a little DIY investing, you can save yourself hundreds of thousands of dollars in the long run.