401K selection advice

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Topic Author
ConfusedUKGuy
Posts: 12
Joined: Wed Mar 14, 2012 10:25 pm

401K selection advice

Post by ConfusedUKGuy »

Background: I have started at a new company who have offered me the following options for a 401K and I need help in deciding what investment options to select and what % I should allocate. Thank you in advance for your help.

Previous employer 401K amount: $193K
Previous employer pension: $86K
I am 45 years old.

These are the options (numbers presented here are the Gross Expense Ratio, The Net Expense Ratio and Limitations)

AMER. EUROPACIFIC GROWTH R4 REREX 0.84% 0.84% N/A
FIDELITY LOW PRICED STOCK FUND FLPSX 0.52% 0.52% N/A
JP MORGAN EQUITY INCOME R6 OIEJX 0.50% 0.50% N/A
MID-CAP GROWTH FUND RPMGX 0.75% 0.75% N/A
MID-CAP VALUE FUND TRMCX 0.78% 0.78% N/A
NEW AMERICA GROWTH FUND PRWAX 0.79% 0.79% N/A
SMALL-CAP STOCK FUND OTCFX 0.89% 0.89% N/A
VANGUARD EXTENDED MKT INDEX VEXAX 0.07% 0.07% N/A
VANGUARD INST INDEX VINIX 0.04% 0.03% N/A
VANGUARD TTL INT STOCK IND ADM VTIAX 0.11% 0.11% N/A
VICTORY INTEGRITY SMCP VAL R6 MVSSX 0.95% 0.95% N/A

BONDS
NEW INCOME FUND PRCIX 0.54% 0.52% Contractual Expires 09/30/2020
VANGUARD TOTAL BOND INDEX ADM VBTLX 0.05% 0.05% N/A

MONEY MARKET / STABLE VALUE
TRP STABLE VALUE FUND SCH B SVF-B 0.25% 0.25% N/A

RETIREMENT
RETIREMENT 2005 FUND TRRFX 0.53% 0.53% N/A
RETIREMENT 2010 FUND TRRAX 0.53% 0.53% N/A
RETIREMENT 2015 FUND TRRGX 0.56% 0.56% N/A
RETIREMENT 2020 FUND TRRBX 0.59% 0.59% N/A
RETIREMENT 2025 FUND TRRHX 0.63% 0.63% N/A
RETIREMENT 2030 FUND TRRCX 0.66% 0.66% N/A
RETIREMENT 2035 FUND TRRJX 0.68% 0.68% N/A
RETIREMENT 2040 FUND TRRDX 0.70% 0.70% N/A
RETIREMENT 2045 FUND TRRKX 0.71% 0.71% N/A
RETIREMENT 2050 FUND TRRMX 0.71% 0.71% N/A
RETIREMENT 2055 FUND TRRNX 0.72% 0.72% N/A
RETIREMENT 2060 FUND TRRLX 0.72% 0.72% N/A
retiredjg
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Joined: Thu Jan 10, 2008 12:56 pm

Re: 401K selection advice

Post by retiredjg »

ConfusedUKGuy wrote: Sun Oct 27, 2019 3:59 pm AMER. EUROPACIFIC GROWTH R4 REREX 0.84% 0.84% N/A
FIDELITY LOW PRICED STOCK FUND FLPSX 0.52% 0.52% N/A
JP MORGAN EQUITY INCOME R6 OIEJX 0.50% 0.50% N/A
MID-CAP GROWTH FUND RPMGX 0.75% 0.75% N/A
MID-CAP VALUE FUND TRMCX 0.78% 0.78% N/A
NEW AMERICA GROWTH FUND PRWAX 0.79% 0.79% N/A
SMALL-CAP STOCK FUND OTCFX 0.89% 0.89% N/A
VANGUARD EXTENDED MKT INDEX VEXAX 0.07% 0.07% N/A
VANGUARD INST INDEX VINIX 0.04% 0.03% N/A this is a 500 index fund
VANGUARD TTL INT STOCK IND ADM VTIAX 0.11% 0.11% N/A
VICTORY INTEGRITY SMCP VAL R6 MVSSX 0.95% 0.95% N/A

BONDS
NEW INCOME FUND PRCIX 0.54% 0.52% Contractual Expires 09/30/2020
VANGUARD TOTAL BOND INDEX ADM VBTLX 0.05% 0.05% N/A

MONEY MARKET / STABLE VALUE
TRP STABLE VALUE FUND SCH B SVF-B 0.25% 0.25% N/A

RETIREMENT
RETIREMENT 2005 FUND TRRFX 0.53% 0.53% N/A
RETIREMENT 2010 FUND TRRAX 0.53% 0.53% N/A
RETIREMENT 2015 FUND TRRGX 0.56% 0.56% N/A
RETIREMENT 2020 FUND TRRBX 0.59% 0.59% N/A
RETIREMENT 2025 FUND TRRHX 0.63% 0.63% N/A
RETIREMENT 2030 FUND TRRCX 0.66% 0.66% N/A
RETIREMENT 2035 FUND TRRJX 0.68% 0.68% N/A
RETIREMENT 2040 FUND TRRDX 0.70% 0.70% N/A
RETIREMENT 2045 FUND TRRKX 0.71% 0.71% N/A
RETIREMENT 2050 FUND TRRMX 0.71% 0.71% N/A
RETIREMENT 2055 FUND TRRNX 0.72% 0.72% N/A
RETIREMENT 2060 FUND TRRLX 0.72% 0.72% N/A
Just look for the low expense ratios.

How much you should put in which fund depends on what you want your stock to bond ratio to be.
averagedude
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Joined: Sun May 13, 2018 3:41 pm

Re: 401K selection advice

Post by averagedude »

I would use VINIX, VEXAX, VTIAX, and VBTLX. You need to determine your asset allocation and how much exposure you want to international stocks. Here is a sample portfolio of someone who desires a 70/30 AA with 30 percent in International stocks.
VINIX 35%
VEXAX. 14%
VTIAX. 21%
VBTLX. 30%
lakpr
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Re: 401K selection advice

Post by lakpr »

Averagedude's portfolio is spot on. There's a paper by Vanguard that shows that having 20% of the stocks in international stocks provides about 85% of the diversification benefit to the portfolio; adding 30% gives you 99% of the diversification benefit. Adding more international stocks than that does not increase the diversification benefit, and in fact, based on recent returns, lowers your returns (international equities lagged US equities by a good 4% margin over the last two decades).

I also use an Age-10 to Age-15 in bonds, thus for a 45 year old, 30% bonds is right on spot.
Topic Author
ConfusedUKGuy
Posts: 12
Joined: Wed Mar 14, 2012 10:25 pm

Re: 401K selection advice

Post by ConfusedUKGuy »

Thank you everyone for your advice....
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1789
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Re: 401K selection advice

Post by 1789 »

VANGUARD funds look great. You can create 2-3 fund portfolio with those.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
retired@50
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Location: Living in the U.S.A.

Re: 401K selection advice

Post by retired@50 »

ConfusedUKGuy wrote: Sun Nov 03, 2019 10:55 am Thank you everyone for your advice....
Are you intending to roll your previous employer 401k balance to your new 401k plan?

If not, you may want to take a hard look at those investment options and expense ratios to see how they compare to your new 401k plan choices.

I like the portfolio averagedude laid out as well.

Regards,
This is one person's opinion. Nothing more.
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anon_investor
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Re: 401K selection advice

Post by anon_investor »

If you want to approximate the Total US Stock Market with VINIX+VEXAX, I believe 80(VINIX)/20(VEXAX) would the appropriate proportion.

My 401k plan has similar funds to VINIX (S&P500) and VEXAX (Extended US Market), and I do 80/20 to cover my Total US Stock Market allocation, as that was suggested by other members of this forum.
snailderby
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Re: 401K selection advice

Post by snailderby »

anon_investor wrote: Mon Nov 04, 2019 1:32 pm If you want to approximate the Total US Stock Market with VINIX+VEXAX, I believe 80(VINIX)/20(VEXAX) would the appropriate proportion.

My 401k plan has similar funds to VINIX (S&P500) and VEXAX (Extended US Market), and I do 80/20 to cover my Total US Stock Market allocation, as that was suggested by other members of this forum.
1. +1. According to the wiki, an 82%/18% split between VINIX and VEXAX will roughly approximate the total U.S. stock market.

2. Just as importantly, if not more, you will have to pick a stock/bond ratio (VINIX/VEXAX/VTIAX versus VBTLX) and a U.S./international stock ratio (VINIX/VEXAX versus VTIAX) that you are comfortable with.
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