New job. Need help adding funds to my new 401k

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jbuenoo
Posts: 22
Joined: Wed Jul 06, 2016 2:49 pm

New job. Need help adding funds to my new 401k

Post by jbuenoo » Fri Sep 21, 2018 6:11 pm

Hi! - I just started a new job and the types of funds that are available to me don't seem to fit nicely into the simple portfolio I've built. Up until this point, I've mainly been focusing on trying to keep a 90/10 stock/bond split, with stocks coming from Small Cap, Large Cap, and International.

In my fund list: https://imgur.com/a/DbtoBaK I figured that I should chose most/all from the Aggressive Growth and Growth sections, however, I've yet to consider stuff like Small Value, Equity Energy, etc.

Anyway, here's my current stats:

Age: 29
Single
No debt
Federal Tax Bracket: 25%
State Tax: 0%

Roth 401k
Bonds - 16%
Stocks - 84%
*Equity Index Fund (41%)
*Small Company Index Fund (43%)

Vanguard Roth IRA
VTSAX - $31,000

Vanguard Taxable Account
VTIAX - $25,5000

Emergency Fund
$26,000 ** in the process of figuring out how much to reduce this by and then where to put the money

As it stands, my current allocation is rougly:
Stocks - 75%
Bonds - 7%
Cash - 18%

Please let me know if you need any more info! Thank you!

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Duckie
Posts: 5949
Joined: Thu Mar 08, 2007 2:55 pm

Re: New job. Need help adding funds to my new 401k

Post by Duckie » Fri Sep 21, 2018 6:35 pm

jbuenoo wrote:I just started a new job and the types of funds that are available to me don't seem to fit nicely into the simple portfolio I've built.
You have an expensive 401k plan with complicated options. The least worst options appear to be:
  • Vanguard Growth Index Fund 0.65%
  • Vanguard Small Cap Value Index 0.67%
  • iShares MSCI EAFE Growth ETF 1.06%
  • John Hancock Bond Fund 0.79%
I'd use just Vanguard Growth Index Fund in this account and consider it a large cap fund like the 500 Index. Get everything else in your other accounts.

Is this 401k going to be pre-tax or Roth? If this is pre-tax I might, might, put bonds here instead.

3504PIR
Posts: 572
Joined: Mon Jul 26, 2010 2:46 am

Re: New job. Need help adding funds to my new 401k

Post by 3504PIR » Sat Sep 22, 2018 2:25 am

double post
Last edited by 3504PIR on Sat Sep 22, 2018 2:27 am, edited 1 time in total.

3504PIR
Posts: 572
Joined: Mon Jul 26, 2010 2:46 am

Re: New job. Need help adding funds to my new 401k

Post by 3504PIR » Sat Sep 22, 2018 2:26 am

The DFA funds would be my choice. I can’t read the fund names but would go for the ones that come closest to your AA. You may want to keep your bonds in your IRA. I can’t see the names of many funds, but could read the stable value, JH bond fund and DFA inflation bond fund. There may be others but the three I could read weren’t great, but of the three I’d choose the JH bond fund.

Silverado
Posts: 175
Joined: Fri Oct 18, 2013 6:07 pm

Re: New job. Need help adding funds to my new 401k

Post by Silverado » Sat Sep 22, 2018 6:53 am

Duckie wrote:
Fri Sep 21, 2018 6:35 pm
jbuenoo wrote:I just started a new job and the types of funds that are available to me don't seem to fit nicely into the simple portfolio I've built.
You have an expensive 401k plan with complicated options. The least worst options appear to be:
  • Vanguard Growth Index Fund 0.65%
  • Vanguard Small Cap Value Index 0.67%
  • iShares MSCI EAFE Growth ETF 1.06%
  • John Hancock Bond Fund 0.79%
I'd use just Vanguard Growth Index Fund in this account and consider it a large cap fund like the 500 Index. Get everything else in your other accounts.

Is this 401k going to be pre-tax or Roth? If this is pre-tax I might, might, put bonds here instead.
Yeah, ouch. Hopefully yOP is getting a match, because the company is sticking it to her/him allowing a plan with those fees.

I also say just 100% in the Vanguard Growth Index Fund for now, and then adjust other holdings to desired allocation as you start to build this new account. But, as Duckie alluded to, you need to consider where your bonds are held. I would prefer bonds at 0.79% in plan and VTSAX at 0.04% outside, not considering taxes as your total balance grows.

livesoft
Posts: 62699
Joined: Thu Mar 01, 2007 8:00 pm

Re: New job. Need help adding funds to my new 401k

Post by livesoft » Sat Sep 22, 2018 7:25 am

Why did responders miss all the index funds that are offered? Hint: Fund names have "multi-index" in them. I'd pick one of them and just call this done. But why not tell us what one of them has in it please? A 2060 Multi-Index fund is going to be aggressive growth. A 2020 Multi-Index fund is going to be heavily weighted in a bond [index] fund.

Also click on the "expense ratio" column title to sort on expense ratio.
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jbuenoo
Posts: 22
Joined: Wed Jul 06, 2016 2:49 pm

Re: New job. Need help adding funds to my new 401k

Post by jbuenoo » Sat Sep 22, 2018 8:48 am

Duckie wrote:
Fri Sep 21, 2018 6:35 pm
jbuenoo wrote:I just started a new job and the types of funds that are available to me don't seem to fit nicely into the simple portfolio I've built.
You have an expensive 401k plan with complicated options. The least worst options appear to be:
  • Vanguard Growth Index Fund 0.65%
  • Vanguard Small Cap Value Index 0.67%
  • iShares MSCI EAFE Growth ETF 1.06%
  • John Hancock Bond Fund 0.79%
I'd use just Vanguard Growth Index Fund in this account and consider it a large cap fund like the 500 Index. Get everything else in your other accounts.

Is this 401k going to be pre-tax or Roth? If this is pre-tax I might, might, put bonds here instead.
As it stands, it's a traditional 401k. My last 401k was Roth, but I'm starting to figure that it might be better to leave it seeing as I'm now in the beginning of the 24% tax bracket. Contributing to the traditional 401k will potentially reduce my taxable income to the 22% tax bracket. Also, I'm assuming I'll be making more money now than when I retire.

The Vanguard Growth Index does seem to make sense considering the ER, however, does the low ER of that outweigh the higher historical returns of, say, the Vanguard Energy Fund? Also, I'm not sure I should do bonds because they're such a low % of my portfolio and I plan on contributing a solid amount of my paycheck to this 401k.

jbuenoo
Posts: 22
Joined: Wed Jul 06, 2016 2:49 pm

Re: New job. Need help adding funds to my new 401k

Post by jbuenoo » Sat Sep 22, 2018 8:59 am

livesoft wrote:
Sat Sep 22, 2018 7:25 am
Why did responders miss all the index funds that are offered? Hint: Fund names have "multi-index" in them. I'd pick one of them and just call this done. But why not tell us what one of them has in it please? A 2060 Multi-Index fund is going to be aggressive growth. A 2020 Multi-Index fund is going to be heavily weighted in a bond [index] fund.

Also click on the "expense ratio" column title to sort on expense ratio.
I was also thinking of the 2060 Multi-Index fund. Here is what it holds: https://imgur.com/a/JgIxWoN

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: New job. Need help adding funds to my new 401k

Post by livesoft » Sat Sep 22, 2018 9:13 am

jbuenoo wrote:
Sat Sep 22, 2018 8:59 am
I was also thinking of the 2060 Multi-Index fund. Here is what it holds: https://imgur.com/a/JgIxWoN
LOL! That wasn't too helpful. What is in that first fund? Also what's the other 10% of the fund? Talk about obfuscation!
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jbuenoo
Posts: 22
Joined: Wed Jul 06, 2016 2:49 pm

Re: New job. Need help adding funds to my new 401k

Post by jbuenoo » Sun Sep 23, 2018 5:53 pm

livesoft wrote:
Sat Sep 22, 2018 9:13 am
jbuenoo wrote:
Sat Sep 22, 2018 8:59 am
I was also thinking of the 2060 Multi-Index fund. Here is what it holds: https://imgur.com/a/JgIxWoN
LOL! That wasn't too helpful. What is in that first fund? Also what's the other 10% of the fund? Talk about obfuscation!
Sorry, that was all the information that is given to me through the 401k site.

I googled the first fund and it's top 10 holdings are here: https://markets.ft.com/data/funds/tears ... 0P0000VDYT

Does that help?

livesoft
Posts: 62699
Joined: Thu Mar 01, 2007 8:00 pm

Re: New job. Need help adding funds to my new 401k

Post by livesoft » Sun Sep 23, 2018 6:09 pm

I know it is not your fault with what JH is showing you. It is hard to see that the major holding has anything to do with being an index fund from the link you gave. In your shoes, I would talk to the plan sponsor and demand clear answers and expect not to get them.
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jbuenoo
Posts: 22
Joined: Wed Jul 06, 2016 2:49 pm

Re: New job. Need help adding funds to my new 401k

Post by jbuenoo » Mon Sep 24, 2018 11:28 am

Okay, so, I just recieved word that we're changing 401k providers and we will have some new options. Here are most of the new ones: https://imgur.com/a/7QidTpM

I'm thinking:

VSGAX (0.07%)
https://www.morningstar.com/funds/XNAS/VSGAX/quote.html

VIGAX (0.05%)
https://www.morningstar.com/funds/XNAS/VIGAX/quote.html

VMVAX (0.07%)
https://www.morningstar.com/funds/xnas/vmvax/quote.html

These 3 will give me exposure to Large, Small, and Mid cap, which I am currently missing from my portfolio.

mervinj7
Posts: 618
Joined: Thu Mar 27, 2014 3:10 pm

Re: New job. Need help adding funds to my new 401k

Post by mervinj7 » Mon Sep 24, 2018 12:42 pm

Are you tilting towards growth on purpose? If not, just choose the blended equities straight down the middle of your latest chart. That means, for U.S. Stocks, you could choose
81% Fidelity 500 Index Premium Fund
10% Fidelity Mid Cap Index Institutional Premium Fund
9% Fidelity Small Cap Index Premium Fund

Can you list their tickers and their ERs? The above percentages are only approximations based on the wiki:
https://www.bogleheads.org/wiki/Approxi ... ock_market

jbuenoo
Posts: 22
Joined: Wed Jul 06, 2016 2:49 pm

Re: New job. Need help adding funds to my new 401k

Post by jbuenoo » Mon Sep 24, 2018 1:56 pm

Oh, I'm not tilting on purpose. Until going through this process, I hadn't thought much about what value and growth should mean to me. I'm just partial to Vanguard funds I guess.

Thanks for the link though. Reading through that makes what you suggested much more sense.

The plan hasn't provided many details on the new funds, but it should be these:

Fidelity® Small Cap Index Fund - Premium Class (FSSVX - 0.025%)
https://fundresearch.fidelity.com/mutua ... /316146216

Fidelity® Mid Cap Index Fund - Premium Class (FSCKX - 0.025%)
https://fundresearch.fidelity.com/mutua ... /316146281

Fidelity® 500 Index Fund - Premium Class(FUSVX - 0.015%)
https://fundresearch.fidelity.com/mutua ... /315911701

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