401k allocation

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badgerfan123
Posts: 4
Joined: Tue Jul 18, 2017 1:04 pm

401k allocation

Post by badgerfan123 » Sun Oct 15, 2017 12:45 pm

Relative newbie here at least as far as digging into the details of where best to invest/distribute funds in my 401k, any advice appreciated:
My question mainly concerns for my company 401k should I allocate funds differently due to high expense fee? I'm thinking it would be wise over the long term to move all or at least a good portion to other funds with less expense fees, such as one or more of the Vanguard ones.
Would this be a good move on my part, if not, why and what other changes might I make distribution wise?
Below is relevant info on the high growth profile fund, as well as other funds available in the 401k. If more info is needed let me know, I can edit/add info.
37 years old
Current annual income: $48k
Amount in company 401k plan: $90k
100% of 401k is in fund's high growth profile fund with a .55% expense fee
High profile fund is split as follows:
19.5% in Vanguard 500 Index Admiral, VFIAX
9% in American Beacon Small cap, AVFIX
10% in Dodge & Cox, DODGX
5.5% in Goldman Sachs GICUX
5.0% in Glenmede Secured Options, GLSOX
5.0% in Harbor Capitol Appreciate Retirement, HNACX.
4.5% in Morgan Stanley Inst. Small, MFLLX
13.0% in Oakmark Global Advisor, OAYGX
2.0% in Oppenheimer Developing Markets, ODVIX
17.5% in American Funds Europacific Growth, RERGX
5.0% in Vanguard Convertible Securities, VCVSX
4.0% in Vanguard Mid Cap Index Admiral, VIMAX

Other funds available to invest in:
American Beacon Small Cap Value Fund: .84% expense
American funds euro pacific growth fund: .50%
American funds new perspective fund: .45%
Dodge & Cox Stock fund: .52%
Eaton vance Atlanta cap smid cap fund: .87%
Goldman sachs intl. sm cap insights fund: .97%
Harbor capital appreciation fund: .62%
Jp morgan mid cap value fund: .95%
MFS Blended research core equity fund: .48%
Oppenheimer developing markets: .88%
T Rowe price qm US small cap gr eq.: .66%
Vanguard 500 index fund (Adm): .04%
Vanguard explorer fund: .34%
Vanguuard mid cap index fund: .06%
Vanguard REIT index fund: .12%
Vanguard small cap index: .06%
Vanguard total intl stock index fund (Adm): .11%
Vanguard total stock market index fund (Adm): .04%
Metropolitan west total return bond fund: .44%
Pimco foreign bond fund: .51%
Vanguard intermed term treasury fund: .10%
Vanguard total bond market index fund (Adm): .05%
Fidelity money market fund: .18%

retiredjg
Posts: 30602
Joined: Thu Jan 10, 2008 12:56 pm

Re: 401k allocation

Post by retiredjg » Sun Oct 15, 2017 1:05 pm

If I had that plan, these are the funds I'd choose from. You will notice they are the lowest cost funds in the plan. Over the long haul, the higher fees could make a significant difference.
  • Vanguard 500 index fund (Adm): .04%
    Vanguuard mid cap index fund: .06%
    Vanguard small cap index: .06%
    Vanguard REIT index fund: .12%
    Vanguard total intl stock index fund (Adm): .11% <---
    Vanguard total stock market index fund (Adm): .04% <---
    Vanguard intermed term treasury fund: .10%
    Vanguard total bond market index fund (Adm): .05% <---
You don't really need all of them. You could have a simple 3 fund portfolio just using the 3 with an arrow.

https://www.bogleheads.org/wiki/Three-fund_portfolio

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Fudgie
Posts: 108
Joined: Sun Oct 11, 2015 12:01 pm

Re: 401k allocation

Post by Fudgie » Sun Oct 15, 2017 1:06 pm

You have great 401K options!

Vanguard Total Stock
Vanguard Total International Stock
Vanguard Total Bond

Pick the percentages of each one that you want, and you're done!

That's Taylor's famous Three Fund Portfolio

https://www.bogleheads.org/wiki/Three-fund_portfolio

Good luck!
"That's entertainment!" - Vlad the Impaler

cherijoh
Posts: 4053
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: 401k allocation

Post by cherijoh » Sun Oct 15, 2017 1:22 pm

I agree with retiredjg and fudgie that you should just go with a 3-fund "lazy" portfolio. Over time, a 0.4 - 0.5 % additional ER will add up.

If you are stumped for the appropriate split, I would review the asset allocations for the VG target retirement funds nearest your expected retirement dates. ( I think they include a dollop of International bond, but I'd just roll whatever that amount is into total bond fund). If you are risk averse you could base your AA to mimic a TR fund with a date sooner than your prospective retirement date; If you want to be more aggressive then mimic a TR fund with a later target date.

badgerfan123
Posts: 4
Joined: Tue Jul 18, 2017 1:04 pm

Re: 401k allocation

Post by badgerfan123 » Tue Oct 17, 2017 1:44 pm

Thanks for the responses, sounds like my line of thinking was generally correct so I'll look to make similar changes to what was suggested.

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