Keeping my retirement investments on autopilot

It's that time of year again, time to make my annual contributions to my retirement accounts for the previous tax year (2010.) I always try to max-out my contributions. I made the full $6,000 that I am entitle to make to my ROTH IRA. Those of us over 50 get to contribute an extra $1,000. I also made the maximum contribution to my SEP-IRA retirement account. I gave a tiny amount of thought to the question of how to invest that money, but I quickly decided that my current "auto-pilot" approach was still the best approach for me, at least for now. Rather than trying to time the market or engage in asset allocation, I put all of the new money into the same target-date fund that I have used for the past three years, Fidelity Freedom 2025 Fund (FFTWX). That target date is presuming that I retire at age 70 in 2024. I placed the buy order this morning, so it will execute at the closing price this afternoon.

I did seriously consider switching to a comparable fund at Vanguard that would have lower expenses or a fund at T. Rowe Price that has had better performance, but it just didn't seem worth the hassle since my total retirement assets are still far too modest to be worth the effort compared to spending that same effort seeking additional work income. In a few more years I may have accumulated enough assets for such a difference to matter, but I'm reasonably content with what I have. Actually, if I have a little extra free-time or even down-time later this year I will likely look at maybe opening an account at one or both of those firms.

Overall, I am reasonably satisfied with keeping my retirement investments on autopilot. I didn't sell anything when the market dropped in 2008 and early 2009 and my regular annual contribution in April 2009 caught a big portion of the market bounce after the bottom in March 2009, more than recouping any losses from 2008. Target-date funds are rather bland and boring, but that's okay for me for right now.

I had filed for personal bankruptcy back in 2005, so I really only have five years of contributions in my accounts, plus a small amount in a couple of old IRA accounts from "the old days" when I had depleted all of my assets due to difficulty finding work after the dot-com crash decimated technology spending. I have just over 13 years before my "planned" retirement and I intend to contribute the maximum to my retirement accounts in each of those years. In truth, all of this retirement savings will add up to only a modest increment of additional income over my Security Income (being very conservative in withdrawals), but every dollar of additional income will be greatly appreciated I am sure.

-- Jack Krupansky