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401k Advice

Posted: Thu Aug 16, 2018 8:50 pm
by div
Hello, noob here. Age 31.
Tax status: MFJ
Tax: 24% Fed, 9.3% State

I changed jobs recently. Need advice on what to do with the old 401k and also what to select in the new 401k.
Both accounts are on Fidelity. AFAIK, there are no extra fees if I keep the old 401k as it is.
Desired allocation: 70/20 and 10 as alternatives

Old 401k allocation (~$137k):
FID CONTRAFUND (FCNTX) - 28%
FID EXT MKT IDX PR (FSEVX) - 25%
FID 500 INDEX PR (FUSVX) - 24%
VANG TOT BD MKT ADM (VBTLX) - 23%

Old 401k funds:
Stocks:
AF AMER MUTUAL R6 (RMFGX) - 0.3%
FID 500 INDEX PR (FUSVX) - 0.015%
FID CONTRAFUND (FCNTX) - 0.74%
FID EXT MKT IDX PR (FSEVX) - 0.045%
GS GROWTH OPPS INST (GGOIX) - 0.96%
JPM MIDCAP VALUE L (FLMVX) - 0.86%
DFA US TARGET VALUE (DFFVX) - 0.37%
FID SM CAP ENH INDX (FCPEX) - 0.64%
TRP NEW HORIZONS (PRNHX) - 0.78%
AF EUROPAC GROWTH R6 (RERGX) - 0.49%
AF SMALLCAP WORLD R6 (RLLGX) - 0.7%
DFA EMERGING MARKETS (DFEMX) - 0.58%
FID INTL INDEX PR (FSIVX) - 0.045%
DFA REAL EST SEC I (DFREX) - 0.19%

Blended:
AF TRGT DATE 2010 R4 (RDATX) - 0.68%
AF TRGT DATE 2015 R4 (RDBTX) - 0.67%
AF TRGT DATE 2020 R4 (RDCTX) - 0.69%
AF TRGT DATE 2025 R4 (RDDTX) - 0.71%
AF TRGT DATE 2030 R4 (RDETX) - 0.73%
AF TRGT DATE 2035 R4 (RDFTX) - 0.74%
AF TRGT DATE 2040 R4 (RDGTX) - 0.75%
AF TRGT DATE 2045 R4 (RDHTX) - 0.76%
AF TRGT DATE 2050 R4 (RDITX) - 0.76%
AF TRGT DATE 2055 R4 (RDJTX) - 0.76%
AF TRGT DATE 2060 R4 (RDKTX) - 0.83%

Bonds:
PUTNAM STABLE VALUE - 0.42%
FID CAPITAL & INCOME (FAGIX) - 0.67%
PIMCO TOT RETURN ADM (PTRAX) - 0.8%
VANG TOT BD MKT ADM (VBTLX) - 0.05%
DFA INF PRT SEC PORT (DIPSX) - 0.12%

Short-term:
FID GOVT MMKT (SPAXX) - 0.42%

--
New 401k plan is allowing after-tax contributions with in-service rollovers.
Funds are mostly custom funds. So there are no tickers. There is also Fidelity BrokerageLink option.

New 401k funds:
(I tried to list the top holdings for some of the funds)
Stocks:
Vanguard Institutional Extended Market Index Trust - 0.03%
Vanguard Institutional Total International Stock Market Index Trust - 0.07%
Vanguard Institutional 500 Index Trust - 0.01%
US LARGE CAP STOCK - 0.33%
-- (Dodge & Cox Stock - 40.05%, Fidelity® Contrafund® K - 20.03%, Fidelity Growth Compy Commingled Pl 1 - 19.85%)
US SMALL & MID CAP - 0.64%
-- (Fidelity® Low-Priced Stock K 25.09%, Carillon Eagle Small Cap Growth R6 25.06%, Voya Mid Cap Growth Trust 24.90%)
INTERNATIONAL STOCK - 0.65%
-- (MFS® Instl International Equity - 50.05% and Fidelity Diversified Intl Commingled Pl - 49.95%)

Blended:
BALANCED FUND (~60% stocks) - 0.27%
Vanguard Target Retirement 2015 Trust Select - 0.05%
Vanguard Target Retirement 2020 Trust Select - 0.05%
Vanguard Target Retirement 2025 Trust Select - 0.05%
Vanguard Target Retirement 2030 Trust Select - 0.05%
Vanguard Target Retirement 2035 Trust Select - 0.05%
Vanguard Target Retirement 2040 Trust Select - 0.05%
Vanguard Target Retirement 2045 Trust Select - 0.05%
Vanguard Target Retirement 2050 Trust Select - 0.05%
Vanguard Target Retirement 2055 Trust Select - 0.05%
Vanguard Target Retirement 2060 Trust Select - 0.05%
Vanguard Target Retirement 2065 Trust Select - 0.05%
Vanguard Target Retirement Income Trust Select - 0.05%

Bonds:
Vanguard Institutional Total Bond Market Index Trust - 0.03%
STABLE VALUE FUND (100% Cash allocation) - 0.47%
DIVERSIFIED BOND - 0.18%
REAL RETURN - 0.32%
-- (Vanguard Inflation-Protected Secs I - 63.12%, Invesco Global REITs Trust - 36.88%)

Re: 401k Advice

Posted: Thu Aug 16, 2018 9:17 pm
by yatesd
I won't address the new allocation, but why not roll over old 401K into an IRA account with Vanguard, Fidelity, or Schwab? This will give you more flexibility long-term.

Re: 401k Advice

Posted: Thu Aug 16, 2018 9:24 pm
by div
yatesd wrote:
Thu Aug 16, 2018 9:17 pm
I won't address the new allocation, but why not roll over old 401K into an IRA account with Vanguard, Fidelity, or Schwab? This will give you more flexibility long-term.
Forgot to mention, for the first time I did a Backdoor Roth this year with $5.5k. Hence I don't think I can rollover into an IRA.

Re: 401k Advice

Posted: Thu Aug 16, 2018 9:32 pm
by yatesd
Well, I slowed down and looked at your new choices and your new 401K seems to have very low fees. I still like the idea of just sticking with a Target fund and at .05 that is pretty good. I believe my 401K is .09 for the exact same thing.

I don't believe anything will prevent your from rolling over your entire 401K into an IRA. You should be able to do this anytime. Pick your favorite fund family and initiate the process with them. I like it because it puts you fully in control of your money.

- I believe you can technically access IRA money at 55
- Downside is you can't take out loan against money (but not something you really want to do anyway)

Re: 401k Advice

Posted: Thu Aug 16, 2018 9:55 pm
by PFInterest
yatesd wrote:
Thu Aug 16, 2018 9:17 pm
I won't address the new allocation, but why not roll over old 401K into an IRA account with Vanguard, Fidelity, or Schwab? This will give you more flexibility long-term.
Nope stop. Backdoor rIRA.

Re: 401k Advice

Posted: Fri Aug 17, 2018 6:47 pm
by Duckie
div wrote:Old 401k funds:
The best options are:
  • FID 500 INDEX (FUSVX) 0.015% -- Large caps, 80% of US stocks
  • FID EXT MKT IDX (FSEVX) 0.045% -- Mid/small caps, 20% of US stocks
  • FID INTL INDEX (FSIVX) 0.045% -- Developed markets, 75% of international stocks
  • VANG TOT BD MKT (VBTLX) 0.05% -- US bonds
New 401k funds:
The best options are:
  • Vanguard Institutional 500 Index Trust 0.01% -- Large caps, 80% of US stocks
  • Vanguard Institutional Extended Market Index Trust 0.03% -- Mid/small caps, 20% of US stocks
  • Vanguard Institutional Total International Stock Market Index Trust 0.07% -- Complete international stocks
  • Vanguard Institutional Total Bond Market Index Trust 0.03% -- US bonds
  • Or the Target Retirement fund 0.05% that comes closest to your AA
The new 401k has better, cheaper options. If you can, roll the old 401k into the new 401k.

Re: 401k Advice

Posted: Fri Aug 17, 2018 8:00 pm
by yatesd
PFInterest wrote:
Thu Aug 16, 2018 9:55 pm
yatesd wrote:
Thu Aug 16, 2018 9:17 pm
I won't address the new allocation, but why not roll over old 401K into an IRA account with Vanguard, Fidelity, or Schwab? This will give you more flexibility long-term.
Nope stop. Backdoor rIRA.
This assumes a ROTH is the better choice for the OP today and he is able to pay the taxes now.

Re: 401k Advice

Posted: Sat Aug 18, 2018 6:36 am
by PFInterest
yatesd wrote:
Fri Aug 17, 2018 8:00 pm
PFInterest wrote:
Thu Aug 16, 2018 9:55 pm
yatesd wrote:
Thu Aug 16, 2018 9:17 pm
I won't address the new allocation, but why not roll over old 401K into an IRA account with Vanguard, Fidelity, or Schwab? This will give you more flexibility long-term.
Nope stop. Backdoor rIRA.
This assumes a ROTH is the better choice for the OP today and he is able to pay the taxes now.
If one has to use a backdoor rIRA, it means you make too much to deduct a tIRA. So yes, it's the only choice.

Re: 401k Advice

Posted: Sat Aug 18, 2018 7:08 am
by yatesd
PFInterest wrote:
Sat Aug 18, 2018 6:36 am
yatesd wrote:
Fri Aug 17, 2018 8:00 pm
PFInterest wrote:
Thu Aug 16, 2018 9:55 pm
yatesd wrote:
Thu Aug 16, 2018 9:17 pm
I won't address the new allocation, but why not roll over old 401K into an IRA account with Vanguard, Fidelity, or Schwab? This will give you more flexibility long-term.
Nope stop. Backdoor rIRA.
This assumes a ROTH is the better choice for the OP today and he is able to pay the taxes now.
If one has to use a backdoor rIRA, it means you make too much to deduct a tIRA. So yes, it's the only choice.
OK, this suggestion is irrelevant. Rolling over a 401K to an IRA has nothing to do with income.

Re: 401k Advice

Posted: Sat Aug 18, 2018 8:24 am
by ruralavalon
Are you making the maximum $18.5k annual employee deferral to your 401k?

The new 401k has good, inexpensive fund options. If the new 401k will accept a rollover, then I suggest rolling the old 401k over into the new 401k.This simplifies your portfolio, giving you one less account to keep track of and manage, and keeps open the option to do a backdoor Roth IRA.

Duckie has correctly identified the better funds to use in your new 401k plan.

Re: 401k Advice

Posted: Sat Aug 18, 2018 8:36 am
by PFInterest
yatesd wrote:
Sat Aug 18, 2018 7:08 am

This assumes a ROTH is the better choice for the OP today and he is able to pay the taxes now.

OK, this suggestion is irrelevant. Rolling over a 401K to an IRA has nothing to do with income.
i assumed you were talking about choosing a tIRA vs a rIRA as per your post quoted above.

Re: 401k Advice

Posted: Sat Aug 18, 2018 8:37 am
by PFInterest
yatesd wrote:
Thu Aug 16, 2018 9:32 pm
- I believe you can technically access IRA money at 55
- Downside is you can't take out loan against money (but not something you really want to do anyway)
also since no one else has addressed this
- no you cannot access IRA at 55, you are thinking of a 401k/403b.

Re: 401k Advice

Posted: Sat Aug 18, 2018 8:48 am
by ruralavalon
PFInterest wrote:
Sat Aug 18, 2018 8:37 am
yatesd wrote:
Thu Aug 16, 2018 9:32 pm
- I believe you can technically access IRA money at 55
- Downside is you can't take out loan against money (but not something you really want to do anyway)
also since no one else has addressed this
- no you cannot access IRA at 55, you are thinking of a 401k/403b.
PFInterest is correct. You can withdraw money from your 401k without penalty at age 55, at age 59.5 for money in an IRA.