How much is simplicity worth? Also, am I lucky, or what!

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How much is simplicity worth? Also, am I lucky, or what!

Postby BuckyBadger » Mon Jan 28, 2013 9:57 am

I decided that I would look up my fees today -- just to see how bad they were. I knew that my Vanguard funds would be pretty good, but I figured that my old 403b and my HSA account would be pretty bad. This is what I came up with:

Image

I was astounded. Especially by my old 403b and the HSA! I honestly didn't even think that 0.02% was possible.

So I had always intended on transferring my old 403b into my new 403b so that everything would be at Vanguard and I wouldn't have to log into JPMorgan when looking at my accounts and figuring out my allocation, but now I'm not so sure. Is it worth it to take my Total US Stock at 0.02% and turn it into Total US Stock at 0.18%? I thought I would do it for sure, but now I'm having second thoughts. Even the 0.18% is so low, though, maybe I'm just kidding myself?

And on another note, I read so many threads about people who have terrible 401k and 403b fund options, and I feel so very lucky that I am able to say that 0.22% is my highest fee. I wish everyone's company provided such great low cost options.

So would you guys switch your fund over to Vanguard if you were in my shoes? Or just let it hang out at JPMorgan for the next thirty years?

(FYI "Her Bonds" is at zero because I just changed my contribution today to add it in next paycheck. That's what prompted me to look everything up. I'm trying to get bonds back up before they get off by more than 5%. This damn up market is making it tough! :annoyed :happy )
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Re: How much is simplicity worth? Also, am I lucky, or what!

Postby livesoft » Mon Jan 28, 2013 10:04 am

When you look at the JPMorgan 403(b) does the 403(b) site quote the NAV the exact same as the NAV shown elsewhere (at Vanguard)? Do your statements show the exact same distributions as shown at the fund sponsor's (not JPMorgan, not 403(b)) web site?
It's all about short-term opportunistic rebalancing due to a short-term change in one's asset allocation, uh, I mean opportunistic rebalancing, uh I mean rebalancing, uh I mean market timing.
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Re: How much is simplicity worth? Also, am I lucky, or what!

Postby BuckyBadger » Mon Jan 28, 2013 10:08 am

When I google the ticker I get this:

Fund Basics
Morningstar Overall Rating:
Total Assets: 23.73B
Category: Large Blend
Annual Report Expense Ratio (net): 0.02%


Which is the same as I get on the JPMorgan website.

When I look it up on Vanguard.com I get the same thing:

Fund facts
Asset class Domestic Stock - General
Category Large Blend
Expense ratio as of 01/15/2013 0.02%


Is this what you meant? I may have misunderstood the question?

ETA: Nope - misunderstood the question. Just googled "NAV." I'll work on that...
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Re: How much is simplicity worth? Also, am I lucky, or what!

Postby 2retire » Mon Jan 28, 2013 10:21 am

Trust, but verify. Goggling and checking the fund website isn't good enough. Either log into you plan's website and pull down the information yourself or ask your plan administrator to give you the info from the new employee packet. That should have the information specific to your plan.
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Re: How much is simplicity worth? Also, am I lucky, or what!

Postby BuckyBadger » Mon Jan 28, 2013 10:31 am

From JPMorgan website:

NAV (2013-01-25) $ 34.15


From Vanguard website:
Doesn't use the word "NAV" but I think it's the same thing:

Price as of 01/25/2013 $34.15
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Re: How much is simplicity worth? Also, am I lucky, or what!

Postby dbr » Mon Jan 28, 2013 10:34 am

You have access to institutional share classes of Vanguard funds. Those ER's can't be duplicated in a retail account. 401/403/xxx plans should never have anything other than at least this good.

You still need to investigate what total costs you will have at JPM. At least there must be trading costs if you want to buy or sell?
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Re: How much is simplicity worth? Also, am I lucky, or what!

Postby Easy Rhino » Mon Jan 28, 2013 7:03 pm

I'm not used to the concept of a JP Morgan 401k having super low fees. Maybe there are some other "wrap fees" or annual fees on the account?
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Re: How much is simplicity worth? Also, am I lucky, or what!

Postby lindisfarne » Mon Jan 28, 2013 8:45 pm

Edit: Morningstar has VTSAX listed with ER of .05, but vanguard.com lists .06. :confused
VTSAX (Admiral shares of Total Stock Market) has an ER of .05.06 in a Vanguard account. You need $10K for admiral shares.

Upon further digging, Morningstar says "Net Expense Ratio: Annual Report 12/31/2011 .05" but "Net Expense Ratio: Prospectus 04/26/2012 .06"

I wonder why Morningstar isn't current on this?
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Administration costs ?

Postby Taylor Larimore » Mon Jan 28, 2013 9:35 pm

Bucky:

It is very rare for a 403b fund to have lower TOTAL cost than the same directly held fund with Vanguard. What about the 403b administration costs which are usually more than a low Expense Ratio? Of course, it is possible that the employer is underwriting the administration costs.

A good way to check is to compare a fund's annual return in the 403b with the same Vanguard fund. Vanguard fund annual returns are available on their website and on Morningstar's website.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
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