Opinions on 401k options

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Opinions on 401k options

Post by Poppinjay »

I don't really want to get too detailed. Basically my Roth is around $24,000 and my taxable is around $1,200. I opened both 10 years ago and didn't know what I was doing so didn't do much. After 2 years of reading books and trying to educate myself I've decided on an aggressive 85% stocks 15% bonds going forward in an effort to make up for lost time. I'm thinking that for now I'll stick with a 2 fund approach until I get a better feel for what I'm doing and then at a later date add international. I'm low income so maxing the Roth is a struggle, there will be no maxing of the 401k. I do have a decent emergency fund and replacement car fund as well as other near future things I'm saving for and have no debt.

I opened a 401k in January, then on May 1 the company I worked for merged with a larger company and my brand new, first ever 401k was "terminated". July 1 is the entry date for the new employers plan. Because of a "tight turn around" I didn't have the time to go over things as thoroughly as I wanted so I just went with a target date fund, but I can change things later on after everything settles down. The company match is dollar for dollar on the first 3%, and .50 cents for each dollar up to 5%. So if I contribute 5% they contribute 4%. For 2017 we're fully vested from day one, in 2018 they're switching to a 5 year vestment scheme but they're counting my employment history with the previous employer so that won't effect me. The only fees I can see, besides the funds fees, is a administrative fee of "0.80% assessed on the total plan assets, allocated pro rata among participant accounts". I must say this plan is better than the first one I had. Sooo what do you think of these options:

Pioneer Bond Y/intermediate Bond .58%

Large Cap
Amer Beacon Brdwy LgCpV .79%
Vanguard 500 Index Adm .05%
Voya Large-Cap Growth I .79%

Small/Mid Cap
American Beacon Mid Cp Val I .90%
Vanguard Mid Cap Index Adm .08%
MassMutual Select MCGEq III .73%
Vanguard Small Cap Index Adm .08%

American Funds New Prspct R6 World Stock .45%
DFA Large Cap Intl I/ Foreign .23%

Other (various Target date funds)
Vanguard Tar Rtmnt 2045 Inv .16% (apprx. 90/10 stocks/ bonds)
Vanguard REIT Index Adm .12% ( I have a REIT in my Roth)
American Funds AmBal R6 .29%

Should I just stay with the Target fund or try to mix and match?
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Re: Opinions on 401k options

Post by PFInterest »

Target fund is fine.
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Re: Opinions on 401k options

Post by dmnelson »

I would choose your target fund option out of those available - provides diversity and rebalancing all in one. You will need to get your other 5% of bond allocation from your Roth if your goal is 85/15. It certainly wouldn't be unreasonable to do 100% Vanguard 500 Index Adm for your 401K and divide up the rest of your allocation in your Roth IRA if the math works out (depending on how much you can continue contributing to each while at least getting your full employer match). Great job not having any debt.
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Re: Opinions on 401k options

Post by ruralavalon »

Either Vanguard Target Retirement Fund 2045 ER 0.16% or Vanguard 500 Index Fund Admiral Shares (VTSAX) ER 0.04% would be fine in your 401k. Be sure to contribute enough to get the full employer match each year.
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Re: Opinions on 401k options

Post by invst65 »

Poppinjay wrote: The only fees I can see, besides the funds fees, is a administrative fee of "0.80% assessed on the total plan assets, allocated pro rata among participant accounts".
Am I reading that correctly? An almost 1% "administrative fee" for the plan in addition to the fund fees?
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