Help with 401k options at Saks

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tram
Posts: 14
Joined: Thu Feb 20, 2014 9:03 pm

Help with 401k options at Saks

Post by tram » Sat Mar 01, 2014 10:21 pm

Quick help for a family member with which funds to select from the list.

Wells Fargo Stable Return Fund N (no ticker info) (no er info) - no info, probably system was down when I checked
PIMCO Total Return/Inst (PTTRX) - .46%
Dodge & Cox Balance (DODBX) - .53%
American Beacon Stephens Sm Cp Gr Inv (STSGX) - 1.37%
American Funds AMCAP R6 (RAFGX) - .38%
Black Rock Equity Dividend Instl (MADVX) - .74%
Columbia Acorn Z (ACRNX) - .82%
Columbia Small Cap Value Fund II Z (NSVAX) - 1.07%
Fidelity Low-Priced Stock (FLPSX) - .80%
Neuberger Berman Genesis Instl (NBGIX) - .85%
Vanguard Institutional Index I (VINIX) - .04%
American Funds Euro Pacific Gr R6 (RERGX) - .50%

Which funds should I recommend they choose? There is a 50% match.
My initial idea was VINIX (S&P500 index) and the stable value fund.
But, on second look, I thought that maybe PTTRX would be worth a look for the fixed asset portion. And that RERGX would also be worth a look for the international portion.

Thanks

mnvalue
Posts: 1086
Joined: Sun May 05, 2013 2:22 pm

Re: Help with 401k options at Saks

Post by mnvalue » Sun Mar 02, 2014 12:56 am

I think you're on exactly the right track. Obviously, it depends a lot on their overall situation. If they have other accounts or their spouse has other accounts, then you pick the best options across accounts to make one big portfolio.

jjbiv
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Joined: Sun Sep 18, 2011 8:23 pm

Re: Help with 401k options at Saks

Post by jjbiv » Sun Mar 02, 2014 3:36 am

Vanguard Institutional Index index is one-tenth the cost of the next lowest cost investment option. I'd stick with VINIX and investigate further the stable return fund. An IRA or taxable account would be good locations to add additional asset classes. I don't think the funds available in the 401k make it worthwhile to hold those additional asset classes within the 401k unless it is absolutely necessary to do so.

mnvalue
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Joined: Sun May 05, 2013 2:22 pm

Re: Help with 401k options at Saks

Post by mnvalue » Sun Mar 02, 2014 3:41 am

I forgot to note... you're not going to be able to get much information on the stable value option. At least that's what I've found with Wells Fargo. The ticker symbol provided seems made up. The 401k platform should show recent return information.

tram
Posts: 14
Joined: Thu Feb 20, 2014 9:03 pm

Re: Help with 401k options at Saks

Post by tram » Sun Mar 02, 2014 11:03 am

I was able to find some info on the stable value ER, it's .36%. I think S&P500, PIMCO, and stable value are the way go. They don't have enough cash to afford an IRA at the moment. This 401k, her spouses 403b, their respective pensions and ss are what they have. Her spouses 403b is hard to navigate through, it doesn't allow for changing investment options, it's all going in to a stable value fund.
As far as allocation: their average age is 52, I was able to estimate their combined ss benefit (ss website) at around 3000/mo. Their pension is harder to pin down - it's a function of total union contributions at retirement. How should they allocate? stock/bond 50/50? Should ss/pension/SV be included in bond? If so, how do I value ss and pension of 4000/mo (assuming their combined pensions is 1000/mo)? If not, and I think not (clearer), what should the AA be? 60/40?

Thanks

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ruralavalon
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Location: Illinois

Re: Help with 401k options at Saks

Post by ruralavalon » Sun Mar 02, 2014 12:06 pm

tram wrote:Which funds should I recommend they choose? There is a 50% match.
My initial idea was VINIX (S&P500 index) and the stable value fund.
But, on second look, I thought that maybe PTTRX would be worth a look for the fixed asset portion. And that RERGX would also be worth a look for the international portion.
They should be sure to contribute enough to get the full match in each account.

In his 401k account use:
(1) Vanguard Institutional Index I (VINIX) - er 0.04%, for domestic stock
(2) American Funds Euro Pacific Gr R6 (RERGX) - er 0.50%, for international stock
(3) Wells Fargo Stable Return Fund N er 0.36%
OR
PIMCO Total Return/Inst (PTTRX) - .46%
Use the Stable Value if the interest being paid is fairly high, say 3% or more, otherwise the PIMCO fund. link to forum post on PTTRX; and link to blog post on PTTRX
tram wrote: I was able to find some info on the stable value ER, it's .36%. I think S&P500, PIMCO, and stable value are the way go. They don't have enough cash to afford an IRA at the moment. This 401k, her spouses 403b, their respective pensions and ss are what they have. Her spouses 403b is hard to navigate through, it doesn't allow for changing investment options, it's all going in to a stable value fund.

As far as allocation: their average age is 52, I was able to estimate their combined ss benefit (ss website) at around 3000/mo. Their pension is harder to pin down - it's a function of total union contributions at retirement. How should they allocate? stock/bond 50/50? Should ss/pension/SV be included in bond? If so, how do I value ss and pension of 4000/mo (assuming their combined pensions is 1000/mo)? If not, and I think not (clearer), what should the AA be? 60/40?
SS and pension should be considered in setting the asset allocation, as both affect their ability and need to take risk in their investing. Both SS and pensions reduce the need for investing in bond or stable value funds.

At age 52 a 60/40 stock bond allocation would be fairly typical: link.

An allocation of 30% of stocks in international stocks would be typical: link.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

tram
Posts: 14
Joined: Thu Feb 20, 2014 9:03 pm

Re: Help with 401k options at Saks

Post by tram » Sun Mar 02, 2014 5:54 pm

Thanks

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