New Retirement Plan - Advice Needed

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Topic Author
vss317
Posts: 38
Joined: Sun Apr 13, 2014 12:02 pm

New Retirement Plan - Advice Needed

Post by vss317 »

I'm at a cross roads on what to do with my retirement and every year when I get my account statements, I like to check things out. This is mainly for me, my wife is happy with her 401k plan (target date fund, contributes 17%, including match) and pension but we want to open an IRA for her as well. I feel my 401k options have pretty high expense ratios, with the lowest being 0.61 seen below in the new plan.

Current Retirement:
Age: 35
Yearly Contributions: approximately $10,000, depending on work
401k: 12%+3% company match to Target Date Fund (expense ratio 0.76)
Vanguard Roth IRA: $50 bi-weekly contributions to Target Date Fund (expense ratio 0.15)
403b: estimate $30,000ish sitting in state retirement fund

New Plan (approximate values, depends on work):
Vanguard Roth IRA (Me): Total Stock Market Index Fund Admiral Shares (max contribution $6,000, expense ratio 0.04)
Vanguard Roth IRA (Wife): STAR Fund ($2,000, expense ration 0.32, switch to Total International Stock Fund eventually when we hit the minimum needed)
401k: Bond Fund of America-R4 (contribute $2,000 plus company match, expense ratio 0.61)
403b: keep holding


My thinking is to reduce the expense ratios as much as possible and try to get to the three-fund portfolio, using my 401k for the bond fund and both IRAs for the stock funds. Does this seem good or should I stick to my current plan?

Thank you.
Misenplace
Moderator
Posts: 2893
Joined: Mon Feb 01, 2016 9:46 pm

Re: New Retirement Plan - Advice Needed

Post by Misenplace »

vss317 wrote: Sat Feb 02, 2019 12:56 am My thinking is to reduce the expense ratios as much as possible and try to get to the three-fund portfolio, using my 401k for the bond fund and both IRAs for the stock funds. Does this seem good or ...?

Thank you.
Welcome to the forum. Yes, this plan is good. I am not absolutely clear on your current situation since you have not posted the full Portfolio per the suggested guidelines, but your plan (quoted above) is excellent. You are taking advantage of tax efficient placement, and saving as much as you can. So is your wife. You are doing well. Keep reading here and look over the wiki, including the presentations in the Getting Started post. You may want to repost using the suggested format if you need more explicit guidance.
viewtopic.php?f=1&t=6212
Best,
Misenplace
Thecallofduty
Posts: 90
Joined: Sat Jan 19, 2019 10:59 am

Re: New Retirement Plan - Advice Needed

Post by Thecallofduty »

Based on your post, Your total asset allocation is 80/20 which seems about right for your age. You are contributing 60% to total stock market, 20% total international ans 20% bonds assuming your total contribution on all accounts is 10k for the year.

Any lower expense ratio bond fund in 401k?

Im no expert but overall everything Looks good to me.
-thecallofduty
north2016
Posts: 58
Joined: Fri May 01, 2015 6:30 am

Re: New Retirement Plan - Advice Needed

Post by north2016 »

In general, you are so young that you will be fine as long as you keep saving and buying mostly equity. I agree with trying to reduce expense ratios, especially due to your long investing time horizon.
Topic Author
vss317
Posts: 38
Joined: Sun Apr 13, 2014 12:02 pm

Re: New Retirement Plan - Advice Needed

Post by vss317 »

Thanks for the replies.

Misenplace: I don't post often but been part of the forum for awhile, I like to read all the advice. Some good peeps on here and value the advice given by you and others.


Thecallofduty: that is the lowest expense ratio available out of all my options, not just the bond ones. Kind of sad about it. haha


Well I'll go forth with the new plan and utilize the Roths for the three fund plan. Thanks again.


VSS
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