Fidelity 401k Target Retirement vs S&P

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mentos
Posts: 27
Joined: Mon Feb 15, 2016 9:44 am

Fidelity 401k Target Retirement vs S&P

Post by mentos » Wed Jan 30, 2019 4:37 pm

My wife's 401k is with Fidelity and she has everything in FNSBX but the ER is quite high at 0.65%. We were thinking of moving everything over to their S&P FXAIX which has ER of only 0.015%. Would this be a wise move? We like to keep things simple.

Mister A
Posts: 128
Joined: Tue Oct 21, 2014 4:17 pm

Re: Fidelity 401k Target Retirement vs S&P

Post by Mister A » Wed Jan 30, 2019 5:14 pm

While the higher (but still small) expense ratio is a valid concern with a TDF, you're moving into a completely different risk profile that has no small cap, international, or bond component.

Depending on what funds are available in her 401k, you could likely construct a comparable 3- or 4-fund portfolio with a lower ER but similar risk/return. This may or may not be worth it to you to bother with.

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dunkmachine
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Re: Fidelity 401k Target Retirement vs S&P

Post by dunkmachine » Wed Jan 30, 2019 5:14 pm

The Fidelity Freedom 2050 Fund has about 10% in bonds so if you switch all to FXAIX you will lose your bond position. Do you want to be 100% equity? Do you have bond market index within the 401(k) with low a low ER?

mcraepat9
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Joined: Thu Jul 16, 2015 11:46 am

Re: Fidelity 401k Target Retirement vs S&P

Post by mcraepat9 » Wed Jan 30, 2019 6:25 pm

mentos wrote:
Wed Jan 30, 2019 4:37 pm
My wife's 401k is with Fidelity and she has everything in FNSBX but the ER is quite high at 0.65%. We were thinking of moving everything over to their S&P FXAIX which has ER of only 0.015%. Would this be a wise move? We like to keep things simple.
If you list out the other options (including expense ratios) in your wife's 401k we can better evaluate if this is a good move.

As I'm sure you realize, you are moving from something that is 90% stock to 100% stock, so of course need to evaluate that.
Amateur investors are not cool-headed logicians.

anil686
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Joined: Thu May 08, 2014 12:33 pm

Re: Fidelity 401k Target Retirement vs S&P

Post by anil686 » Thu Jan 31, 2019 4:54 pm

Do you have access to the Fidelity index target date funds? Their ER is only 0.14% and are the index counterparts of the active management FWIW...

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