401k Beginners Guide–How to Invest in a 401k, 403b or TSP
A viewer recently asked me how to pick investments in a 401k. It’s a great question and something that took me years to figure out. When I was getting started, I just picked the mutual funds with highest 10 year returns. What a mistake!
In this video, we’ll walk through how to create a solid investment plan for a 401k. Then using my current 401k, we’ll look at two approaches to picking mutual funds consistent with our plan. Finally, we’ll do the same thing using the mutual funds available in the federal government’s Thrift Savings Plan (TSP).
Resources mentioned in this video:
Vanguard’s model portfolio allocations:
Historical returns of stocks and bonds:
3-Fund Portfolio:
Warren Buffett Portfolio:
Tools & Resources
📚 My Book (of course):
📈 Personal Capital: description of video]
💰 M1 Finance $30 Bonus:
🏆 Best Investment Tracking Apps:
Portfolios
1️⃣ 3-Fund Portfolio:
2️⃣ Merriman Ultimate Buy & Hold Portfolio:
3️⃣ Ray Dalio All Weather Portfolio:
4️⃣ Warren Buffett Portfolio:
ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I’m the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I’m also the author of Retire Before Mom and Dad–The Simple Numbers Behind a Lifetime of Financial Freedom (
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning at no cost to you I earn a commission if you click through and make a purchase and/or subscribe. However, I only recommend products or services that (1) I believe in and (2) would recommend to my own mom….(read more)
LEARN MORE ABOUT: Retirement Planning
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I really wish I would have seen this video earlier.
New subscriber to a great channel. Question: I have an annual salary of 80k and my wife 51k. We both invest in our 401k accounts; 19% in mine, not sure of my wife’s percentage. Our student loans have been recently paid off. Can I invest in a Roth IRA with our current combined annual salary?
@Rob Berger I cannot tell you how happy I am to have found your channel. Thank you so much for all of the straight forward and easy to understand information. I've just started my first 401K with the company I work for and I'm completely new to investing. My issue is that I'm 53 yrs old so I don't have 30 or 40 years to leave investments alone. In your opinion, would I be correct in presuming I shouldn't consider the 90/10 split but rather the 70/30?
Thank you so much, very good video. I am wondering why the most retirement target funds has higher international stock that same as your recommendation 30% international stock? The performance of the international index funds is much lower than USA stock index funds such as VOO or VTI. What is the main reason to have higher percentage of international index funds? Thank you.
Great video. I have just discovered the awful expense ratios of all of my old retirement plans. Time to get busy rolling them over!!!! There is so much to learn but I’m realizing this is doable. Your channel is terrific!
Rob – Thanks for all the great videos. May I ask question here? Perhaps it inspires another video or you might have already covered it and could direct me to that video.
Quick version – Had a 401k with a company (10 years) – left that company and converted it to an IRA . started New job 3.5 years ago so, new 401k. preparing to leave this company and start a new job – Hopefully my final move before retirement as I hit 52 yo this month. Thinking of converting this one to a Roth. Take a hit on taxes now and reap benefits in the future. (current company stopped matching when pandemic started).Looking for strategy on this concept. think it is about $50k balance. Option two is add it to my other IRA. Thanks for any help or direction you can provide.
Thanks for your videos. They are wonderful and very helpful. One thing… when you share your desktop, could you zoom your browser or change your screen resolution to make it easier to see?
@Rob Berger, 1. Do you think right now it's good time to buy bonds? 2. Can I hold more bonds in 401k, hold more stocks in Roth IRA for tax benefits? Pls advise. thank you!
Rob, Thank you so much for answering my questions and sharing your insights! You makes difficult things easy to manage!
Love the TSP.
I am 65% C, 35% S, 5% I
Hi Rob,
First off, I love your videos and just your general delivery of ideas. Makes difficult things easier to understand. I was wondering if you could do a video/series just on bonds and bond index funds? I know you have some great advice sprinkled in to some videos. However, it would be great to have something that just focused on bonds. It gets confusing with yields and interest rates etc. I don't understand exactly what is happening there. Cheers!
Rate My Portfolio
PRGFX- 45% RPMGX- 50% MWTIX- 5%
My company 401k is with T Rowe Price. And unfortunately I don't have a whole lot of options when it comes to choosing funds. I also opened up a Roth IRA with T Rowe Price that has around 10k in it with 7 different funds but I don't know the exact percentages. But they are TRBCX, RPGEX, PRMTX, PRHSX, PRGTX, PRSCX, and TRBUX. Love your content and look forward to learning more from you.