Help with picking 401k investments

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
NotAnInsomniac
Posts: 14
Joined: Wed May 17, 2017 1:25 pm

Help with picking 401k investments

Postby NotAnInsomniac » Thu May 18, 2017 2:00 am

Hi everyone, just recently discovered this forum and I'm learning a lot. I consider myself a novice when it comes to investing. I've been working a few years but only recently started to really think about how my retirement portfolio was doing. We picked my investments without too much rationale. Basically looked at past performance and whatever sounded good (yes I know this is a big no no already). While I do more research (currently reading Bogleheads' Guide to Investing) I was hoping I could get some advice on which investments to pick/trade in my retirement accounts. Hope I provided enough information:

Emergency funds: More than 6 months. Too much sitting in CD's I'm beginning to think.
Debt: House and rental property (Around 4% interest on both mortgages). One leased car. No other debts.
Tax Filing Status: Married
Tax Rate: Federal 33%
State of Residence: California
Age: 35
Desired Asset allocation: I'm thinking 75% stocks/25% bonds
Desired International allocation: Unsure, any recommendations?

Current retirement assets
His 403a - low 5 figures. From old job. No longer contributing to this.
UC PATHWAY 2045 0.15%
UC PATHWAY 2050 0.15%

His 401k - low 6 figures. Currently contributing max with company match.
Stocks
FID 500 INDEX INST (FXSIX) 0.035%
FID CONTRAFUND K (FCNKX) 0.58%
TRP MID CAP GROWTH I (RPTIX) 0.63%
VANG TARGET RET 2050 (VFIFX) 0.16%
Bonds
PIM TOTAL RT INST (PTTRX) 0.47%

His Roth IRA at Vanguard - low 5 figures
VFIFX Vanguard Target Retirement 2050 Fund 0.16%
VWINX Vanguard Wellesley Income Fund Investor Shares 0.22%

Taxable
I plan on making a sizable investment soon at Vanguard and taking advantage of the Personal Advisor Services for a bit while I learn more and hopefully transition to managing on my own. I'm hoping they'll also tweak my Roth IRA investments as well.

Available funds

Funds available in his 403a
Stocks
UC PATHWAY INCOME 0.15%
Other UC Pathway funds etc
FID GROWTH CO K (FGCKX) 0.66%
UC DOM EQ INDEX 0.15%
UC GLOBAL EQUITY FD 0.15%
VANG FTSE SOC IDX IS (VFTNX) 0.12%
VANG SM CP IDX IS PL (VSCPX) 0.04%
FID DIVERSIFD INTL K (FDIKX) 0.92%
UC INTL EQ INDEX 0.15%
DFA EMERGING MARKETS (DFEMX) 0.58%
VANG REIT IDX INST (VGSNX) 0.1%
UC BALANCED GROWTH 0.15%

Bonds
UC TIPS FUND 0.15%
UC SHORT TERM TIPS 0.15%
UC BOND FUND 0.15%
UC SAVINGS FUND 0.15%

Other funds available in his 401k
Stocks
ABF LG CAP VAL INST (AADEX) 0.6%
VANG TOT STK MKT IS (VITSX) 0.035%
GS MID CAP VALUE R6 (GCMUX) 0.74%
VANG MIDCAP IDX ADM (VIMAX) 0.06%
NORTHERN SM CAP VAL (NOSGX) 1.24%
VANG SM CAP IDX ADM (VSMAX) 0.06%
VANG SMCP GR IDX ADM (VSGAX) 0.07%
AF EUROPAC GROWTH R6 (RERGX) 0.5%
VANG TOT INTL STK AD (VTIAX) 0.11%
FID BALANCED K (FBAKX) 0.46%
VANG TARGET RET INC (VTINX) 0.13%
Other Vang Target funds etc

Bonds
MIP CL 1 0.77%
FID INFLAT PROT BOND (FINPX) 0.45%
VANG TOT BD MKT ADM (VBTLX) 0.05%
FIMM GOVT CL I (FIGXX) 0.21%

Questions:
1. 403a - Unsure of what to do with this account. Do the investment choices look poor enough to warrant looking into rolling over into my 401k or something else? Is this even possible? It does have the VANG REIT and a TIPS to choose from. Is this a good account to have these in?

2. 401k - Guessing I should switch my investments to VITSX, VTIAX, and VBTLX?

3. Any other comments and suggestions would be greatly appreciated! Thank you!
Last edited by NotAnInsomniac on Thu May 18, 2017 9:44 am, edited 1 time in total.

Finance-MD
Posts: 178
Joined: Sun Mar 26, 2017 9:27 am

Re: Help with picking 401k investments

Postby Finance-MD » Thu May 18, 2017 7:19 am

Your federal marginal tax rate is very very important for us

https://www.irs.com/articles/2016-feder ... deductions

for quick high estimate
Taxable income = gross earnings - $20,000.
If you want to be closer
Taxable income = gross earnings - $8000 - home mortgage interest 2017 - state income tax 2017 - charity contributions - other pretax deductions from work.

If method 2 is more than method 1 choose method 1.

NotAnInsomniac
Posts: 14
Joined: Wed May 17, 2017 1:25 pm

Re: Help with picking 401k investments

Postby NotAnInsomniac » Thu May 18, 2017 9:43 am

Apologies. Original post updated with federal tax rate.

User avatar
flamesabers
Posts: 891
Joined: Fri Mar 03, 2017 12:05 pm
Location: Rochester, MN

Re: Help with picking 401k investments

Postby flamesabers » Thu May 18, 2017 10:16 am

1. As to whether to keep the 403a or not, I think it depends. This account does have a few institutional funds you might find useful such as Vanguard's small caps index (VSCPX), Vanguard's REIT (VGSNX) and Vanguard's social index fund (VFTNX). If you want to have a REIT fund, I think it's best to put it in a tax-advantaged account because of its tax inefficiency. If you don't think you'll need access to such funds, I would say check with your 401k plan administrator to see if you can roll it over into your 401k.

As to whether you can rollover a 403a to a 401k, here's an IRS chart on the matter:

https://www.irs.gov/pub/irs-tege/rollover_chart.pdf

2. I think it depends on whether you intend to hold taxable accounts or not. If you're planning on investing beyond the limits of your retirement accounts, I would say put the VBTLX in your 401k and keep the VITSX and VITAX as taxable accounts.

NotAnInsomniac
Posts: 14
Joined: Wed May 17, 2017 1:25 pm

Re: Help with picking 401k investments

Postby NotAnInsomniac » Fri May 19, 2017 1:41 am

flamesabers wrote:1. As to whether to keep the 403a or not, I think it depends. This account does have a few institutional funds you might find useful such as Vanguard's small caps index (VSCPX), Vanguard's REIT (VGSNX) and Vanguard's social index fund (VFTNX). If you want to have a REIT fund, I think it's best to put it in a tax-advantaged account because of its tax inefficiency. If you don't think you'll need access to such funds, I would say check with your 401k plan administrator to see if you can roll it over into your 401k.

As to whether you can rollover a 403a to a 401k, here's an IRS chart on the matter:

https://www.irs.gov/pub/irs-tege/rollover_chart.pdf

2. I think it depends on whether you intend to hold taxable accounts or not. If you're planning on investing beyond the limits of your retirement accounts, I would say put the VBTLX in your 401k and keep the VITSX and VITAX as taxable accounts.


1. I forgot I had a Roth IRA at American Funds. I think I will roll this over to my Roth IRA at Vanguard due to the high ERs and likely fees I'm paying at American Funds. I'll have to wait 1 year before I can do a different roll over correct?

2. I do intend to hold taxable accounts eventually but I feel like I should rebalance my tax-protected accounts first then start investing in taxable accounts with mostly Vanguard mutual index funds.

User avatar
flamesabers
Posts: 891
Joined: Fri Mar 03, 2017 12:05 pm
Location: Rochester, MN

Re: Help with picking 401k investments

Postby flamesabers » Fri May 19, 2017 9:04 am

NotAnInsomniac wrote:1. I forgot I had a Roth IRA at American Funds. I think I will roll this over to my Roth IRA at Vanguard due to the high ERs and likely fees I'm paying at American Funds. I'll have to wait 1 year before I can do a different roll over correct?

2. I do intend to hold taxable accounts eventually but I feel like I should rebalance my tax-protected accounts first then start investing in taxable accounts with mostly Vanguard mutual index funds.


1. Here's what the IRS has to say on rollover rules:

https://www.irs.gov/retirement-plans/pl ... tributions

I don't think you'll have to wait a year since:

The one-per year limit does not apply to:
rollovers from traditional IRAs to Roth IRAs (conversions)
trustee-to-trustee transfers to another IRA
IRA-to-plan rollovers
plan-to-IRA rollovers
plan-to-plan rollovers


2. I think either way you'll have to rebalance. If you create a 3-fund portfolio in your tax-advantaged accounts now, you'll have to add more bonds later on to your tax-advantaged accounts as you start to put money in taxable equity funds. Alternatively, you could put just bonds in your tax-advantaged accounts now and you'll get in balance as you start to put money in your taxable equity funds.

wfrobinette
Posts: 484
Joined: Fri Feb 20, 2015 3:14 pm

Re: Help with picking 401k investments

Postby wfrobinette » Fri May 19, 2017 10:02 am

NotAnInsomniac wrote:Hi everyone, just recently discovered this forum and I'm learning a lot. I consider myself a novice when it comes to investing. I've been working a few years but only recently started to really think about how my retirement portfolio was doing. We picked my investments without too much rationale. Basically looked at past performance and whatever sounded good (yes I know this is a big no no already). While I do more research (currently reading Bogleheads' Guide to Investing) I was hoping I could get some advice on which investments to pick/trade in my retirement accounts. Hope I provided enough information:

Emergency funds: More than 6 months. Too much sitting in CD's I'm beginning to think.
Debt: House and rental property (Around 4% interest on both mortgages). One leased car. No other debts.
Tax Filing Status: Married
Tax Rate: Federal 33%
State of Residence: California
Age: 35
Desired Asset allocation: I'm thinking 75% stocks/25% bonds
Desired International allocation: Unsure, any recommendations?

Current retirement assets
His 403a - low 5 figures. From old job. No longer contributing to this.
UC PATHWAY 2045 0.15%
UC PATHWAY 2050 0.15%

His 401k - low 6 figures. Currently contributing max with company match.
Stocks
FID 500 INDEX INST (FXSIX) 0.035%
FID CONTRAFUND K (FCNKX) 0.58%
TRP MID CAP GROWTH I (RPTIX) 0.63%
VANG TARGET RET 2050 (VFIFX) 0.16%
Bonds
PIM TOTAL RT INST (PTTRX) 0.47%

His Roth IRA at Vanguard - low 5 figures
VFIFX Vanguard Target Retirement 2050 Fund 0.16%
VWINX Vanguard Wellesley Income Fund Investor Shares 0.22%

Taxable
I plan on making a sizable investment soon at Vanguard and taking advantage of the Personal Advisor Services for a bit while I learn more and hopefully transition to managing on my own. I'm hoping they'll also tweak my Roth IRA investments as well.

Available funds

Funds available in his 403a
Stocks
UC PATHWAY INCOME 0.15%
Other UC Pathway funds etc
FID GROWTH CO K (FGCKX) 0.66%
UC DOM EQ INDEX 0.15%
UC GLOBAL EQUITY FD 0.15%
VANG FTSE SOC IDX IS (VFTNX) 0.12%
VANG SM CP IDX IS PL (VSCPX) 0.04%
FID DIVERSIFD INTL K (FDIKX) 0.92%
UC INTL EQ INDEX 0.15%
DFA EMERGING MARKETS (DFEMX) 0.58%
VANG REIT IDX INST (VGSNX) 0.1%
UC BALANCED GROWTH 0.15%

Bonds
UC TIPS FUND 0.15%
UC SHORT TERM TIPS 0.15%
UC BOND FUND 0.15%
UC SAVINGS FUND 0.15%

Other funds available in his 401k
Stocks
ABF LG CAP VAL INST (AADEX) 0.6%
VANG TOT STK MKT IS (VITSX) 0.035%
GS MID CAP VALUE R6 (GCMUX) 0.74%
VANG MIDCAP IDX ADM (VIMAX) 0.06%
NORTHERN SM CAP VAL (NOSGX) 1.24%
VANG SM CAP IDX ADM (VSMAX) 0.06%
VANG SMCP GR IDX ADM (VSGAX) 0.07%
AF EUROPAC GROWTH R6 (RERGX) 0.5%
VANG TOT INTL STK AD (VTIAX) 0.11%
FID BALANCED K (FBAKX) 0.46%
VANG TARGET RET INC (VTINX) 0.13%
Other Vang Target funds etc

Bonds
MIP CL 1 0.77%
FID INFLAT PROT BOND (FINPX) 0.45%
VANG TOT BD MKT ADM (VBTLX) 0.05%
FIMM GOVT CL I (FIGXX) 0.21%

Questions:
1. 403a - Unsure of what to do with this account. Do the investment choices look poor enough to warrant looking into rolling over into my 401k or something else? Is this even possible? It does have the VANG REIT and a TIPS to choose from. Is this a good account to have these in?

2. 401k - Guessing I should switch my investments to VITSX, VTIAX, and VBTLX?

3. Any other comments and suggestions would be greatly appreciated! Thank you!



401k, Roths, etc. - mix right % in VTSAX, VTIAX, VBTLX or target date 2050.

Personally I use 3 separate funds so I can weight the 401k/trad IRA heavier bonds and have my Roth and taxable accounts at 100% stock. Until you get into taxable invesments it might just be much easier to do the target date funds so you don't have any need to re balance.

I'd roll the 403b to 401k if you can. If not use the 2050 or 2045 fund there or UC DOM EQ INDEX 0.15% , UC GLOBAL EQUITY FD 0.15% UC BOND FUND 0.15% .

rkhusky
Posts: 3972
Joined: Thu Aug 18, 2011 8:09 pm

Re: Help with picking 401k investments

Postby rkhusky » Fri May 19, 2017 11:13 am

NotAnInsomniac wrote:Desired Asset allocation: I'm thinking 75% stocks/25% bonds


For 80/20, the simplest portfolio, unless you can roll the 403a into the 401K:

403a: UC Pathway 2040
401K: Vanguard Target Retirement 2035
Roth IRA: Vanguard Target Retirement 2035

Add Total Stock, Total International and Intermediate Tax Exempt in taxable at 40/40/20.

NotAnInsomniac
Posts: 14
Joined: Wed May 17, 2017 1:25 pm

Re: Help with picking 401k investments

Postby NotAnInsomniac » Fri May 19, 2017 12:06 pm

rkhusky wrote:
NotAnInsomniac wrote:Desired Asset allocation: I'm thinking 75% stocks/25% bonds


For 80/20, the simplest portfolio, unless you can roll the 403a into the 401K:

403a: UC Pathway 2040
401K: Vanguard Target Retirement 2035
Roth IRA: Vanguard Target Retirement 2035

Add Total Stock, Total International and Intermediate Tax Exempt in taxable at 40/40/20.


Thanks everyone for the replies so far. Very helpful!
I'm liking the idea of using Target funds for tax advantaged accounts actually. However would the difference in ERs be significant enough to pass over the Admiral and Institutional funds I have available to me in the 401k account?

rkhusky
Posts: 3972
Joined: Thu Aug 18, 2011 8:09 pm

Re: Help with picking 401k investments

Postby rkhusky » Fri May 19, 2017 12:37 pm

If the difference is 0.1%, that would be about $1000/yr for a $1M portfolio. Keep in mind that your portfolio will fluctuate by that amount or more daily.


Return to “Investing - Help with Personal Investments”

Who is online

Users browsing this forum: deltaneutral83, drwtsn32, ElwoodBlues, Engineer250, GaryA505, Google [Bot], Kosmo, mcraepat9, MNGopher, oldcomputerguy, Retirement55, Tamalak, thecarrotfund, Thesaints, Twood, WhatsUpB and 103 guests