Portfolio Question - Nationwide 457b

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dignan
Posts: 55
Joined: Mon Nov 23, 2015 1:01 pm
Location: chicago

Portfolio Question - Nationwide 457b

Post by dignan » Tue Apr 18, 2017 1:50 pm

Hi Bogleheads,
Good news! I'm down to 10k on my student loans, which was about 42k about 2 years ago. My side job has really helped me pay down those loans.
Bad news! After all these years I've been with my wife (together 7, married 5), she's just now telling me that she can contribute to a 457b after I thought to ask her about it. :oops: She's not a numbers person, but she can write poems that will push and pull your emotions.
We plan to max the 401k once we're finished paying the student loans. After reviewing our portfolio, I know that you'll notice that we're heavy on domestic stocks. That's because of the limited options in the 401k. I plan to shift things around once our ROTHs have more.

PS - This forum has been a life saver for our family. Thank you.

Emergency funds: about 6 months
Debt: 10k student loans
Tax Filing Status: Married Filing Jointly
Tax Rate: 25% Federal, 3.75% State
State of Residence: Illinois
Age: Him 38, Her 35
Desired Asset allocation: Between 85% stocks / 15% bonds or 90%/10%
Desired International allocation: about 30% of stocks I think

Current retirement assets
xx% fund name (ticker symbol) (expense ratio)

His HSA at HSA Authority
100% VASGX Vanguard LifeStrategy Growth Fund Investor Shares (0.15)

His 401k at MFS Mutual
80% DSPIX Dreyfus Institutional S&P 500 Stock Index Fund Class I (0.20)
10% NMSAX Columbia Small Cap Index Fund Class A (0.45)
10% MFBHX MFS Corporate Bond Fund Class R3 (0.82)
Company match 2% up to 4%

His & Her Roth IRA at Vanguard
100% Target 2045 (VTIVX) (0.16)

529 Plan at Bright Start
100% Index Age Based Fund

Her Pension at IMRF

Contributions

New annual Contributions
$8376 his 401k (Company match 2% up to 4%)
$not sure yet her 457b (no company match)
$5500 his Roth IRA
$5500 her Roth IRA
$6750 his HSA (for retirement, not short term goals)
$1200 529 plan

Questions
1. My wife can contribute to a Nationwide 457b. I read the fee breakdown and was wondering, based on our portfolio, if it's worth contributing to. I left a message to the Financial Representative to find out if this is a government backed account.
General Account Charge: 1.00%
Max Participant Account change: $100 per year
Contract Maintenance Charge: $1m per year
Other expenses and service charges may apply per employer
2. Can someone explain to me what the Nationwide Fixed Account is and it's annual interest yield?

*I stared the funds I thought were worth investing in.

Nationwide 457b fund options
Asset Allocation Funds
Nationwide Destination 2015 Fund - Institutional Service Class 0.64
Nationwide Destination 2020 Fund - Institutional Service Class 0.64
Nationwide Destination 2025 Fund - Institutional Service Class 0.64
Nationwide Destination 2030 Fund - Institutional Service Class 0.65
Nationwide Destination 2035 Fund - Institutional Service Class 0.65
*Nationwide Destination 2040 Fund - Institutional Service Class 0.64
Nationwide Destination 2045 Fund - Institutional Service Class 0.64
Nationwide Destination 2050 Fund - Institutional Service Class 0.64
Nationwide Destination 2055 Fund - Institutional Service Class 0.64
Nationwide Destination 2060 Fund - Institutional Service Class 0.64
Nationwide Investor Destinations Aggressive Fund: Service Class 0.92
Nationwide Investor Destinations Conservative Fund: Service Class 0.87
Nationwide Investor Destinations Moderate Fund: Service Class 0.91
Nationwide Investor Destinations Moderately Aggressive Fund: Service Class 0.94
Nationwide Investor Destinations Moderately Conservative Fund: Service Class 0.88
Specialty
Cohen & Steers Real Estate Securities Fund, Inc. - Class A 1.22
International Stocks
Invesco International Growth Fund - Class R5 0.99
JPMorgan International Equity Fund 1.10
MFS International Value Fund - Class R3 1.01
Nationwide International Index Fund 0.71
New World Fund(SM) - Class R4 1.01
Oppenheimer Global Fund 1.15
Templeton Foreign Fund 1.22
Small Cap Stocks
Nationwide Small Cap Index Fund 0.68
Nationwide Small Company Growth Fund Institutional Service Class 1.21
Nationwide US Small Cap Value Fund - Institutional Service Class 1.31
Nationwide Variable Insurance Trust: Nationwide Multi-Manager NVIT Small Company Fund 1.22
Neuberger Berman Equity Trust(R) - Genesis Fund 1.10
Mid Cap Stocks
JPMorgan Mid Cap Value Fund 1.42
Nationwide Mid Cap Market Index Fund 0.69
Wells Fargo Discovery Fund - Administrative Class 1.12
Large Cap Stocks
American Century Growth Fund 0.98
American Century Value Fund 0.98
*Dreyfus S&P 500 Index Fund 0.51
*Fidelity Contrafund 0.68
Invesco Growth and Income Fund - Class A 0.83
Nationwide Fund - Institutional Service Class 0.78
Nationwide Growth Fund Institutional Service Class 1.09
Nationwide Large Cap Growth Portfolio 0.95
*Nationwide S & P 500 Index Fund 0.42
Neuberger Berman Equity Funds(R) - Socially Responsive Fund 0.86
T.Rowe Price Growth Stock Fund 0.92
*The Growth Fund of America(R), Inc. 0.66
Balanced
*The Income Fund of America(R), Inc. 0.56
Bonds
*Nationwide Bond Index Fund 0.66
Nationwide HighMark Bond Fund Institutional Service Class 0.73
PIMCO Foreign Bond Fund (U.S. Dollar-Hedged) - Class A 0.91
PIMCO Total Return Fund 0.86
Waddell & Reed Advisors High Income Bond Fund 0.76
Short-Term Investments
Federated U.S. Government Securities Fund: 2-5 Years 0.85
Morley Stable Value Retirement Fund - DCVA N/A
Nationwide Money Market Fund 0.89

Annual Effective Interest Yield (%)
*Nationwide Fixed Account 3.50 3.50

Mudpuppy
Posts: 5168
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: Portfolio Question - Nationwide 457b

Post by Mudpuppy » Thu Apr 20, 2017 1:24 am

That's not the greatest 457(b) plan. Combine the 1% account fee with the ERs on those funds and it gets pretty pricey. If this is a non-governmental 457(b), I would personally skip over it. And I've seen Nationwide provide better options to governmental 457(b) plans, although that does depend on the agency's group that oversees retirement plans to a great extent. For example, Nationwide currently runs the California Savings Plus Program and that charges $1.50 per month with <0.15% ER index funds.

Does your wife have access to any other retirement plans? Perhaps a 403(b)?

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David Jay
Posts: 3701
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Portfolio Question - Nationwide 457b

Post by David Jay » Thu Apr 20, 2017 12:11 pm

The 457 is better than a taxable portfolio, but I would max out your 401K, HSA and IRAs (if you are under the IRA income limit) first. Only contribute money to the 457 that would otherwise go into taxable.

I would keep it really simple, only utilizing the SP500 fund (0.42).
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

dignan
Posts: 55
Joined: Mon Nov 23, 2015 1:01 pm
Location: chicago

Re: Portfolio Question - Nationwide 457b

Post by dignan » Thu Apr 20, 2017 1:27 pm

Mudpuppy wrote:That's not the greatest 457(b) plan. Combine the 1% account fee with the ERs on those funds and it gets pretty pricey. If this is a non-governmental 457(b), I would personally skip over it. And I've seen Nationwide provide better options to governmental 457(b) plans, although that does depend on the agency's group that oversees retirement plans to a great extent. For example, Nationwide currently runs the California Savings Plus Program and that charges $1.50 per month with <0.15% ER index funds.

Does your wife have access to any other retirement plans? Perhaps a 403(b)?


I found out that this is a governmental 457b and they charge an administrative fee of 0.95% from the participant account. No other fees are charged aside from this and the fund. The 457b, pension and the IMRF voluntary contribution (guaranteed 7% interest) are the only options available for her.

Mudpuppy
Posts: 5168
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: Portfolio Question - Nationwide 457b

Post by Mudpuppy » Thu Apr 20, 2017 10:05 pm

dignan wrote:I found out that this is a governmental 457b and they charge an administrative fee of 0.95% from the participant account. No other fees are charged aside from this and the fund. The 457b, pension and the IMRF voluntary contribution (guaranteed 7% interest) are the only options available for her.

This is a tough one. The fees are not great for a governmental 457(b), but she should probably be saving more outside of the pension fund than just the annual Roth limitations, just in case the pension fund has issues before she retires.

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