MarcMyWord wrote:I regret the time you spent compiling the expense ratios of all of these funds, as instructed by another poster above. If these are the only funds available in your employer plan, and no fund family other than Price is offered, then the expense ratios essentially become irrelevant, because you have a black-and-white decision--regardless of individual fund expense ratios--between using the plan and not using it at all. If your employer contributes matching funds to the plan, then--although IMO this fund lineup is certainly nowhere near ideal--I definitely think you should contribute to the plan rather than pass by the "free" employer money.
Similarly, if you are going to use this plan, then the same poster's advice to use index funds was also not helpful in this case. There is only one index funds on that list. Even if this plan offered you access to the entire TRP fund lineup--which it doesn't--your index options would still be extremely limited, as Price has skimpy offerings for indexing: on the domestic side, a U.S. total stock market index, an S&P 500 index, and an Extended Market index [the rest of U.S. stocks "after" the S&P 500]. On the foreign side, an International Equity Index of large company stocks in developed markets. And on the fixed income side, an "Enhanced" bond market index, meaning that there's a small amount of active management going on in the selection of securities. And that's it for T. Rowe Price index funds--with only the 500 index available in your plan.
ckwDC wrote:Thanks for the replies and information, very helpful.
To answer some of your questions: Marginal tax rate is 28%, my employer matches 50% of my contributions up to 7% and I plan on saving about $15k annually.
I do not currently have an IRA although I plan on enrolling in a Roth later this month.
I am young (29) and don’t plan on retiring until I’m in my mid to late 60’s, so my AA would not need to be overly conservative in terms of risk exposure.
The advice I’m reading lately is “100 – Age” in stocks (split between domestic and foreign), with the rest in bonds. As I am a new investor I am leaning towards a fairly basic portfolio that would be easy to track/manage.
As a previous poster suggested, I am considering a 70/30 stock/bond split with the Equity Index fund and the Spectrum Income fund. The Equity Index fund has a fairly low ER (0.30%) and a strong return since inception. I would then put my foreign stocks in the IRA. Does this sound reasonable or am I way off base?
ckwDC wrote:I've done a little research and it's my understanding that any kind of fund with a targeted retirement date is generally best avoided,
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