Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
darkhorse
Posts: 146
Joined: Mon Dec 17, 2012 3:13 pm

Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by darkhorse »

Emergency funds: Three months of expenses ( building it up with goal of 6-12 months)

Debt:
~12 k Autoloan @ 2%
~ 35k loan from relative @ 0%
Currently renting no mortgage

Tax Filing Status: Married Filing Jointly
Tax Rate: 33% Federal, 0% State
State of Residence: TN
Age: 31 his 32 her

Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 30% of stocks


Current portfolio
~ 13k

Current retirement assets

Taxable
None

His 401k
Currently none

His Roth IRA at Vanguard
75% Vanguard Target Date 2050 VFIFX 0.19%

Her 403b
25% small ~3k portfolio in target dated fund from old employer
We are leaving it there rather than rolling over to IRA to utilize back door IRA, no administrative fees with previous employer

Contributions

New annual Contributions
$18k his 401k (also specify any employer matching contributions)
Employer 1: 17.4k
Employer 2: 0.6k
$5.5k his Roth IRA (bak door)
$18 k his 457b (will plan to maximize it with goal of 18k, however, may be able to contribute less than that or none especially will start saving for house downpayment)
$5.5k her Roth IRA (back door)
$0 taxable (for retirement, not short term goals)

Available funds
( I work for two employers : major portion of my salary comes from Employer 1)
Employer 1 # 401k
Employer 2 #401k, 457b, ORP (optional retirement plan - 401a)


Funds available in his 401(k) - Employer 1 - (will contribute 17.4k to it)
(+0.20 annual account maintenance fees regardless of choice of fund)
  • Wilmington/MetLife Stable Class 25 W3M5425 0.62
    Prudential Total Return Bond Z PDBZX 0.58

    DFA US Core Equity 1 DFEOX 0.19
    Parnassus Core Equity Instl PRILX 0.67
    Vanguard Total Stock Mkt Idx Adm VTSAX 0.05

    Columbia Select Large Cap Growth UMLGX 0.65
    Vanguard Selected Value Inv VASVX 0.44
    ClearBridge Mid Cap Core IS SBMAX 1.25
    Pioneer Select Mid Cap Growth Y GROYX 0.76

    Vanguard Small Cap Value Index Admiral VSIAX 0.09
    DFA US Small Cap I DFSTX 0.37
    Hartford Small Cap Growth Y HSLIX 0.81

    Hartford International Opportunities Y IHOIX 0.74
    American Funds New World R6 RLLGX 0.65
Funds available in his 401(k) and 457(b) - Employer 2 - (will contribute 0.6k to 401k and rest to the 457b with goal of 18k/year)
(+0.25 annual account maintenance fees regardless of choice of fund)
  • Vanguard institutional Target Retirement Income Inv Asset Allocation 0.1 VILVX
    Vanguard institutional Target Retirement 2010 Inv Asset Allocation 0.1 VIRTX
    Vanguard institutional Target Retirement 2015 Inv Asset Allocation 0.1 VITVX
    Vanguard institutional Target Retirement 2020 Inv Asset Allocation 0.1 VITWX
    Vanguard institutional Target Retirement 2025 Inv Asset Allocation 0.1 VRIVX
    Vanguard institutional Target Retirement 2030 Inv Asset Allocation 0.1 VTTWX
    Vanguard institutional Target Retirement 2035 Inv Asset Allocation 0.1 VITFX
    Vanguard institutional Target Retirement 2040 Inv Asset Allocation 0.1 VIRSX
    Vanguard institutional Target Retirement 2045 Inv Asset Allocation 0.1 VITLX
    Vanguard institutional Target Retirement 2050 Inv Asset Allocation 0.1 VTRLX
    Vanguard institutional Target Retirement 2055 Inv Asset Allocation 0.1 VIVLX
    DFA International Value I International 0.43 DFIVX
    Fidelity International Discovery International 0.91 FIGRX
    Brown Capital Small Company Inv Small Cap 1.26 BCSIX
    Invesco Van Kampen Small Cap Value Y Small Cap 0.89 VSMIX
    Janus Enterprise Fund Mid Cap 0.71 JDMNX
    Columbia Mid Cap Value Z Mid Cap 0.92 NAMAX
    Allianz NFJ Large Cap Value Instl Large Cap 0.76 ANVIX
    Fidelity Contrafund Large Cap 0.64 FCNTX
    Fidelity OTC Portfolio Large Cap 0.83 FOCPX
    Voya Growth and Income I Large Cap 0.58 IIVGX
    Vanguard Institutional Index I Large Cap 0.04 VINIX
    Fidelity Puritan Balanced 0.56 FPURX
    Tennessee Treasury Managed Fund Balanced
    Vanguard Total Bond Market Index Inst Bond 0.06 VBTIX
    Western Asset Core Plus Bond IS Bond 0.43 WAPSX
    Voya Fixed Fund Fixed
    TD Ameritrade SDB Money Market Brokerage
    TD Ameritrade SDB Securities Brokerage
Funds available in ORP (will contribute to 5k including employer match)
(ORP has 3 provider choices: VALIC VOYA and TIAA - I can chose only one group and funds within that group)
(+0.25 annual account maintenance fees regardless of choice of fund)


VALIC
  • American Funds EuroPacific Growth R6 RERGX 0.49
    Vanguard Total Intl Stock Idx Institutional VTSNX 0.12
    American Funds Capital World Growth and Income R6 RWIGX 0.44
    Vanguard REIT Index Admiral VGSLX 0.12
    Vanguard Small Cap Growth Index Inv VISGX 0.23
    Vanguard Small Cap Index Admiral VSMAX 0.09
    Vanguard Small Cap Value Index Inst VSIIX 0.08
    Morgan Stanley Institutional Mid Cap Growth Portfolio MPEGX 0.75
    Vanguard Mid Cap Index Inst VMCIX 0.08
    Vanguard Selected Value Inv VASVX 0.44
    American Funds The Growth Fund of America R6 RGAGX 0.33
    American Funds Fundamental Investors R6 RFNGX 0.31
    Vanguard Institutional Index Inst VINIX 0.04
    American Funds American Mutual R6 RMFGX 0.3
    Wells Fargo Advantage Dow Jones Target 2050 R6 WFQFX 0.37
    Wells Fargo Advantage Dow Jones Target 2040 R6 WFOSX 0.36
    Wells Fargo Advantage Dow Jones Target 2030 R6 WFOOX 0.35
    Wells Fargo Advantage Dow Jones Target 2020 R6 WFOBX 0.3
    Vanguard Total Bond Market Index Inst VBTIX 0.06
    PIMCO Total Return Instl PTTRX 0.46
    Western Asset Inflation Indexed Plus Bond Inst WAIIX 0.41
    Vanguard Prime Money Market VMMXX 0.16
    Fixed Interest Option FB124 N/A
VOYA
  • Stable Value Option - 0.75
    Vanguard® Inflation-Protected Securities Fund - Investor Shares- VIPSX 0.1
    PIMCO Total Return Fund - Institutional Class PTTRX 0.46
    Vanguard® Total Bond Market Index Fund - Signal Shares VBTSX 0.07
    Vanguard® Wellington Fund - Investor Shares VWELX 0.18
    Vanguard® 500 Index Fund - Signal Shares VIFSX 0.05
    Vanguard® Equity Income Fund - Investor Shares VEIPX 0.2
    Vanguard® Windsor II Fund - Investor Shares VWNFX 0.28
    The Growth Fund of America® - Class R-6 RGAGX 0.33
    Vanguard® Mid-Cap Index Fund - Signal Shares VMISX 0.09
    Vanguard® Small-Cap Index Fund - Investor Shares NAESX 0.09
    Vanguard® Explorer Fund - Investor Shares VEXPX 0.36
    Vanguard® Small-Cap Value Index Fund – Investor Shares VISVX 0.23
    American Beacon International Equity Index Fund – Institutional Class AAIEX 0.2
    EuroPacific Growth Fund® - Class R-6 RERGX 0.49
TIAA
  • American Funds EuroPacific Growth Fund® Class R-4 REREX 0.84%
    Columbia Small Cap Value Fund I Class Z CSCZX 1.09%
    CREF Bond Market Account (R3) QCBMIX 0.37%
    CREF Equity Index Account (R3) QCEQIX 0.29%
    CREF Global Equities Account (R3) QCGLIX 0.38%
    CREF Growth Account (R3) QCSCIX 0.32%
    CREF Inflation-Linked Bond Account (R3) QCILIX 0.32%
    CREF Money Market Account (R3) QCMMIX 0.32%
    CREF Social Choice Account (R3) QCSCIX 0.33%
    CREF Stock Account (R3) QCSTIX 0.37%
    Eaton Vance Large-Cap Value Fund Class I EILVX 0.76%
    PIMCO Total Return Fund Administrative Class PTRAX 0.71%
    Prudential Jennison Mid Cap Growth Fund Class Z PEGZX 0.77%
    Sentinel Small Company Fund Class I SIGWX 0.86%
    Templeton Global Bond Fund Advisor Class TGBAX 0.65%
    TIAA Real Estate Account QREARX 0.87%
    TIAA-CREF Lifecycle 2010 Fund (Institutional) TCTIX 0.39%
    TIAA-CREF Lifecycle 2015 Fund (Institutional) TCNIX 0.40%
    TIAA-CREF Lifecycle 2020 Fund (Institutional) TCWIX 0.41%
    TIAA-CREF Lifecycle 2025 Fund (Institutional) TCYIX 0.43%
    TIAA-CREF Lifecycle 2030 Fund (Institutional) TCRIX 0.44%
    TIAA-CREF Lifecycle 2035 Fund (Institutional) TCIIX 0.45%
    TIAA-CREF Lifecycle 2040 Fund (Institutional) TCOIX 0.46%
    TIAA-CREF Lifecycle 2045 Fund (Institutional) TTFIX 0.46%
    TIAA-CREF Lifecycle 2050 Fund (Institutional) TFTIX 0.46%
    TIAA-CREF Lifecycle 2055 Fund (Institutional) TTRIX 0.46%
    TIAA-CREF Lifecycle Retirement Income Fund (Institutional) TLRIX 0.38%
    TIAA-CREF Mid-Cap Value Fund (Institutional) TIMVX 0.41%

Objective:

1.My priorities as follows: emergency fund --> 401k ---> pay off relative (on regular mothly basis) ---> backdoor roth ---> 457b/saving for house.

Tentative Plan


Here are the two portfolio options based on wiki and other resources
( I have treated 457b and 401k from employer 2 together due to same fund choices and relatively very small percentage of contribution is in 401k in employer 2)

Portfolio 1
(Pros: lower average weighted ER
Cons: Roth will be all international)

His and Her Roth 17.0%: VFWIX Vanguard FTSE All-World ex-US Index Fund Investor Shares (0.29-->0.14 with admiral/ETF option once eligible)

His ORP Valic 8.4%: VTSNX Vanguard Total Intl Stock Idx Institutional (0.12+0.25)

His 457b/401k_2 1.4%: DFIVX DFA International Value I International (0.43+0.25)
18.6%: VINIX Vanguard Institutional Index I Large Cap (0.04+0.25)
10%: VBTIX Vanguard Total Bond Market Index Inst Bond (0.06+0.25)


His 401k_1: 39.5%: VTSAX Vanguard Total Stock Mkt Idx Adm VTSAX (0.05+0.20)
4.7%: VSIAX Vanguard Small Cap Value Index Admiral (0.09+0.20)


Portfolio 2
(Pros: Roth will be total stock market
Cons: slightly higher weighted ER)

His and Her Roth 17.0%:VTSMX Vanguard Total Stock Market Index Fund Investor Shares (0.17-->0.05 once eligible for Admiral Share VTSAX)

His ORP Valic 8.47%: VTSNX Vanguard Total Intl Stock Idx Institutional (0.12+0.25)

His 457b/401k_2 18.5%: DFIVX DFA International Value I International (0.43+0.25)
1.6%: VINIX Vanguard Institutional Index I Large Cap (0.04+0.25)
10%: VBTIX Vanguard Total Bond Market Index Inst Bond (0.06+0.25)


His 401k_1: 44.2%: VTSAX Vanguard Total Stock Mkt Idx Adm VTSAX (0.05+0.20)


Questions:

1. Any alternate portfolio recommendations?

1. Which portfolio looks better between these two, any modifications?

3. Is it reasonable "assumption" that in Portfolio with VTSAX Total stock in Roth opposed to all international VFWIX, I may end up with larger Roth portion of the portfolio with 30 year horizon. If so, does it justify slightly higher weighted average ER (mainly due to larger portion of DFIVX in 457b). I feel the difference in weighted ER is probably small enough to ignore it.


Appreciate your time helping me, thank you. :happy

darkhorse
Last edited by darkhorse on Sun Nov 22, 2015 1:56 pm, edited 1 time in total.
Stan Dup
Posts: 776
Joined: Fri May 10, 2013 10:25 am

Re: Help needed with portfolio - overwhelmed by choices

Post by Stan Dup »

These should help:
viewtopic.php?f=10&t=88005
https://www.bogleheads.org/wiki/Asset_a ... e_accounts

Keep it as simple as possible. Skip the REITs for now.
"The tyranny of compounding expenses is the eighth deadly sin." - George Sisti
Topic Author
darkhorse
Posts: 146
Joined: Mon Dec 17, 2012 3:13 pm

Re: Help needed with portfolio - overwhelmed by choices

Post by darkhorse »

Stan Dup wrote:These should help:
viewtopic.php?f=10&t=88005
https://www.bogleheads.org/wiki/Asset_a ... e_accounts

Keep it as simple as possible. Skip the REITs for now.
Thank you for the wiki link, I reviewed it and found it very useful.

Any comments on DFA vs VG when I try to incorporate it into ?
Stan Dup
Posts: 776
Joined: Fri May 10, 2013 10:25 am

Re: Help needed with portfolio - overwhelmed by choices

Post by Stan Dup »

darkhorse wrote:
Stan Dup wrote:These should help:
viewtopic.php?f=10&t=88005
https://www.bogleheads.org/wiki/Asset_a ... e_accounts

Keep it as simple as possible. Skip the REITs for now.
Thank you for the wiki link, I reviewed it and found it very useful.

Any comments on DFA vs VG when I try to incorporate it into ?
Their performance looks similar but VTSAX has a lower ER, so go with that.
"The tyranny of compounding expenses is the eighth deadly sin." - George Sisti
Topic Author
darkhorse
Posts: 146
Joined: Mon Dec 17, 2012 3:13 pm

Re: Help needed with portfolio - overwhelmed by choices

Post by darkhorse »

Any thoughts on portfolio fellow bogleheads? Thank you :sharebeer

Stan Dup wrote:
darkhorse wrote:
Stan Dup wrote:These should help:
viewtopic.php?f=10&t=88005
https://www.bogleheads.org/wiki/Asset_a ... e_accounts

Keep it as simple as possible. Skip the REITs for now.
Thank you for the wiki link, I reviewed it and found it very useful.

Any comments on DFA vs VG when I try to incorporate it into ?
Their performance looks similar but VTSAX has a lower ER, so go with that.
Thank you, I have updated the Original post with two tentative portfolio, could you suggest any changes? Thank you
User avatar
Aptenodytes
Posts: 3786
Joined: Tue Feb 08, 2011 7:39 pm

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by Aptenodytes »

I skipped to the questions. I don't think the other stuff is relevant. If you are worried about your Roth being all international or all US stocks, you can stop worrying. Although it would be slightly better if the Roth were all small-value, being all international or all US stocks is a very close second. If the Roth had to be all bonds that would be a disadvantage requiring a weighing of the tradeoffs. But you have no tradeoffs to weigh.

So if that's really the nub you can go with your first choice.
Topic Author
darkhorse
Posts: 146
Joined: Mon Dec 17, 2012 3:13 pm

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by darkhorse »

Aptenodytes wrote:I skipped to the questions. I don't think the other stuff is relevant. If you are worried about your Roth being all international or all US stocks, you can stop worrying. Although it would be slightly better if the Roth were all small-value, being all international or all US stocks is a very close second. If the Roth had to be all bonds that would be a disadvantage requiring a weighing of the tradeoffs. But you have no tradeoffs to weigh.

So if that's really the nub you can go with your first choice.

Great, that helps. For some reason I thought us stocks over 25 years may outperform international
blueman457
Posts: 472
Joined: Sun Jul 26, 2015 12:19 pm

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by blueman457 »

Questions about the accounts:

Is the 457b governmental? Is there employer matching for your 401k?
Topic Author
darkhorse
Posts: 146
Joined: Mon Dec 17, 2012 3:13 pm

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by darkhorse »

blueman457 wrote:Questions about the accounts:

Is the 457b governmental? Is there employer matching for your 401k?
1. Yes 457b is governmental with TN
2. For 401k with employer 1: match of 4% for 5% contribution from my side, employer 2: match of 5 0 dollar per month. I get most of my salary from employer 1 and I plan to direct 1 7 400 to 401k with employer 1 and 600 to employer 2 to get match of 600

Let me now if I can give any other information, thank you.
User avatar
Duckie
Posts: 9777
Joined: Thu Mar 08, 2007 1:55 pm

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by Duckie »

darkhorse wrote:Her 403b
small ~3k portfolio in target dated fund from old employer
We are leaving it there rather than rolling over to IRA to utilize back door IRA, no administrative fees with previous employer
Accounts worth less than $5K can be removed from employer plans. Are you sure it'll be fine where it is? It's only $3K, she could just roll it and convert it.
Funds available in his 401(k) - Employer 1 - (will contribute 17.4k to it)
The best options are:
  • Vanguard Total Stock Mkt Idx Adm VTSAX 0.05
    Prudential Total Return Bond Z PDBZX 0.58
I would put 100% into VTSAX.
Funds available in his 401(k) and 457(b) - Employer 2 - (will contribute 0.6k to 401k and rest to the 457b with goal of 18k/year)
The best options are:
  • Vanguard Institutional Index I Large Cap 0.04 VINIX
    DFA International Value I International 0.43 DFIVX
    Vanguard Total Bond Market Index Inst Bond 0.06 VBTIX
    or one of the Target Retirement funds
I'd go with VBTIX up to the AA limit and then start adding VINIX. Only use DFIVX if you can't fit any more TISM into your Roth IRAs.
Funds available in ORP (will contribute to 5k including employer match)
The best options at Valic are:
  • Vanguard Institutional Index Inst VINIX 0.04
    Vanguard Mid Cap Index Inst VMCIX 0.08
    Vanguard Small Cap Index Admiral VSMAX 0.09
    Vanguard REIT Index Admiral VGSLX 0.12
    Vanguard Total Intl Stock Idx Institutional VTSNX 0.12
    Vanguard Total Bond Market Index Inst VBTIX 0.06
The best options at Voya are:
  • Vanguard® 500 Index Fund - Signal Shares VIFSX 0.05
    Vanguard® Mid-Cap Index Fund - Signal Shares VMISX 0.09
    Vanguard® Small-Cap Index Fund - Investor Shares NAESX 0.09
    American Beacon International Equity Index Fund – Institutional Class AAIEX 0.2 <-- Developed markets only.
    Vanguard® Total Bond Market Index Fund - Signal Shares VBTSX 0.07
The best options at TIAA are:
  • CREF Equity Index Account (R3) QCEQIX 0.29%
    CREF Bond Market Account (R3) QCBMIX 0.37%
    or one of the Lifecycle funds
Given your choices I recommend Valic because of the Total International fund.

You have an AA of 90% stocks, 10% bonds (I'd increase that to 20%), with 30% of stocks in international. That breaks down to 63% US stocks, 27% international stocks, and 10% bonds. At the end of 2016 you could have something like:

His 401k #1 -- $17.4K -- 25%
25% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05% + 0.20% = 0.25%)

His 401k #2 -- $0.6K -- 1%
1% (VBTIX) Vanguard Total Bond Market Index Fund Institutional Shares (0.06% + 0.25% = 0.31%)

His 457b -- $18K -- 26%
17% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.04% + 0.25% = 0.29%)
9% (VBTIX) Vanguard Total Bond Market Index Fund Institutional Shares (0.06% + 0.25% = 0.31%)

His 401a at Valic -- $5K -- 7%
7% (VTSNX) Vanguard Total International Stock Index Fund Institutional Shares (0.12% + 0.25% = 0.37%)

His Roth IRA at Vanguard -- $15K -- 21% <-- Includes 2016 contributions.
16% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)
5% (VEXMX) Vanguard Extended Market Index Fund Investor Shares (0.23%) <-- Roughly 80% large caps (VINIX) plus 20% mid/small caps (VEXMX) makes up the total US stock market. Could be skipped.

Her Roth IRA at Vanguard -- $14K -- 20% <-- Includes 2015 & 2016 contributions plus conversion from old 403b.
20% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.14%)

Something to think about.
Last edited by Duckie on Mon Nov 30, 2015 1:15 pm, edited 2 times in total.
User avatar
retiredjg
Posts: 54082
Joined: Thu Jan 10, 2008 11:56 am

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by retiredjg »

I too would just go ahead and convert Her $3k 403b to Roth IRA. That account is just going to be a nuisance.

The exception would be if she is likely to have future 401k/403b or IRA money that she might want to roll into that good 403b (if that good 403b will accept rollovers). Truth is, that custodian may just send her a check because they don't want to do the paperwork every year for such a small account. I believe they are allowed to do that. You might check the plan documents.

Portfolio 1
(Pros: lower average weighted ER
Cons: Roth will be all international)
I do not consider filling the Roth IRAs with international as a con. I don't think it is going to matter much at all and even if there is a difference in which grows faster, that cannot be known now and it will be a few drops in the bucket compared to your portfolio.

If you don't feel comfortable with just international in the Roth IRAs, put Total Stock in one and Total International in the other. And remember that whatever you put in there is not cemented in - it can always be changed at a later date.

Why did you choose the FTSE fund for international instead of Total International? The FTSE fund does not have small caps and I believe it may have a higher ER.

Why are you interested in the DFA International Value fund? Not suggesting it is a bad fund to have, but most people who want value in international also want value in their US stocks. So your choice strikes me as a little odd. I see that you put a little extra SCV in one of the portfolios and not the other. What was your thinking on that?

In reality, either portfolio is fine and the differences do not appear to be significant to me. There is no way to predict which will "do better". The most important thing is how much money you save. All the rest is much less important. Of course "all the rest" is what we spend an inordinate amount of time discussing around here. :D
Topic Author
darkhorse
Posts: 146
Joined: Mon Dec 17, 2012 3:13 pm

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by darkhorse »

Duckie wrote:
darkhorse wrote:Her 403b
small ~3k portfolio in target dated fund from old employer
We are leaving it there rather than rolling over to IRA to utilize back door IRA, no administrative fees with previous employer
Accounts worth less than $5K can be removed from employer plans. Are you sure it'll be fine where it is? It's only $3K, she could just roll it and covert it.
Funds available in his 401(k) - Employer 1 - (will contribute 17.4k to it)
The best options are:
  • Vanguard Total Stock Mkt Idx Adm VTSAX 0.05
    Prudential Total Return Bond Z PDBZX 0.58
I would put 100% into VTSAX.
Funds available in his 401(k) and 457(b) - Employer 2 - (will contribute 0.6k to 401k and rest to the 457b with goal of 18k/year)
The best options are:
  • Vanguard Institutional Index I Large Cap 0.04 VINIX
    DFA International Value I International 0.43 DFIVX
    Vanguard Total Bond Market Index Inst Bond 0.06 VBTIX
    or one of the Target Retirement funds
I'd go with VBTIX up to the AA limit and then start adding VINIX. Only use DFIVX if you can't fit any more TISM into your Roth IRAs.
Funds available in ORP (will contribute to 5k including employer match)
The best options at Valic are:
  • Vanguard Institutional Index Inst VINIX 0.04
    Vanguard Mid Cap Index Inst VMCIX 0.08
    Vanguard Small Cap Index Admiral VSMAX 0.09
    Vanguard REIT Index Admiral VGSLX 0.12
    Vanguard Total Intl Stock Idx Institutional VTSNX 0.12
    Vanguard Total Bond Market Index Inst VBTIX 0.06
The best options at Voya are:
  • Vanguard® 500 Index Fund - Signal Shares VIFSX 0.05
    Vanguard® Mid-Cap Index Fund - Signal Shares VMISX 0.09
    Vanguard® Small-Cap Index Fund - Investor Shares NAESX 0.09
    American Beacon International Equity Index Fund – Institutional Class AAIEX 0.2 <-- Developed markets only.
    Vanguard® Total Bond Market Index Fund - Signal Shares VBTSX 0.07
The best options at TIAA are:
  • CREF Equity Index Account (R3) QCEQIX 0.29%
    CREF Bond Market Account (R3) QCBMIX 0.37%
    or one of the Lifecycle funds
Given your choices I recommend Valic because of the Total International fund.

You have an AA of 90% stocks, 10% bonds (I'd increase that to 20%), with 30% of stocks in international. That breaks down to 63% US stocks, 27% international stocks, and 10% bonds. At the end of 2016 you could have something like:

His 401k #1 -- $17.4K -- 25%
25% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05% + 0.20% = 0.25%)

His 401k #2 -- $0.6K -- 1%
1% (VBTIX) Vanguard Total Bond Market Index Fund Institutional Shares (0.06% + 0.25% = 0.31%)

His 457b -- $18K -- 26%
17% (VINIX) Vanguard Institutional Index Fund Institutional Shares (0.04% + 0.25% = 0.29%)
9% (VBTIX) Vanguard Total Bond Market Index Fund Institutional Shares (0.06% + 0.25% = 0.31%)

His 401a at Valic -- $5K -- 7%
7% (VTSNX) Vanguard Total International Stock Index Fund Institutional Shares (0.12% + 0.25% = 0.37%)

His Roth IRA at Vanguard -- $15K -- 21% <-- Includes 2016 contributions.
16% (VTSAX) Vanguard Total Stock Market Index Fund Admiral Shares (0.05%)
5% (VEXMX) Vanguard Extended Market Index Fund Investor Shares (0.23%) <-- Roughly 80% large caps (VINIX) plus 20% mid/small caps (VEXMX) makes up the total US stock market. Could be skipped.

Her Roth IRA at Vanguard -- $14K -- 20% <-- Includes 2015 & 2016 contributions plus conversion from old 403b.
20% (VTIAX) Vanguard Total International Stock Index Fund Admiral Shares (0.14%)

Something to think about.

Thank you Duckie, that helps streamlining the things a lot, wife is likely to get a new job within 6 months. if not will, rollover to IRA as suggested.
Topic Author
darkhorse
Posts: 146
Joined: Mon Dec 17, 2012 3:13 pm

Re: Please Help needed Choosing Portfolio across plans: Two 401ks, 457b, Roth and 401a (updated)

Post by darkhorse »

retiredjg wrote:I too would just go ahead and convert Her $3k 403b to Roth IRA. That account is just going to be a nuisance.

The exception would be if she is likely to have future 401k/403b or IRA money that she might want to roll into that good 403b (if that good 403b will accept rollovers). Truth is, that custodian may just send her a check because they don't want to do the paperwork every year for such a small account. I believe they are allowed to do that. You might check the plan documents.

Portfolio 1
(Pros: lower average weighted ER
Cons: Roth will be all international)
I do not consider filling the Roth IRAs with international as a con. I don't think it is going to matter much at all and even if there is a difference in which grows faster, that cannot be known now and it will be a few drops in the bucket compared to your portfolio.

If you don't feel comfortable with just international in the Roth IRAs, put Total Stock in one and Total International in the other. And remember that whatever you put in there is not cemented in - it can always be changed at a later date.

Why did you choose the FTSE fund for international instead of Total International? The FTSE fund does not have small caps and I believe it may have a higher ER.

Why are you interested in the DFA International Value fund? Not suggesting it is a bad fund to have, but most people who want value in international also want value in their US stocks. So your choice strikes me as a little odd. I see that you put a little extra SCV in one of the portfolios and not the other. What was your thinking on that?

In reality, either portfolio is fine and the differences do not appear to be significant to me. There is no way to predict which will "do better". The most important thing is how much money you save. All the rest is much less important. Of course "all the rest" is what we spend an inordinate amount of time discussing around here. :D
---I agree with simplifying small balance 403b, wife may get new job in few months which may allow us to rollover. if not will convert to IRA
---DFA fund choice was based on vague memory of reading DFA may be slightly better over comparable VG fund without knowing the reasons behind it
--- Extra SCV was unintentional

-- As far as international in Roth goes, I am getting comfortable now based on inputs by members and reading.
-- I realized after you pointed out that Total Int Stock will be better choice

Thank you for your valuable input.
Post Reply