401K Options Review

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Topic Author
houseofnine
Posts: 10
Joined: Sat Jan 11, 2020 4:40 pm

401K Options Review

Post by houseofnine » Sun Jan 12, 2020 6:43 pm

Hello,

My company offers the following choices in our 401k plan. Based on the BH investing philosophy, these fees seem rather high. Also not a fantastic breadth of choices. Am I looking at this wrong? Please let me know before I storm into the CFOs office and demand satisfaction. FWIW there is a pretty generous match program.

SF Guaranteed
Sel MetWest Total Return Bond MWTRX 0.67%
MM Sel T. Rowe Price Ret Bal MMBZX 0.99%
MM Sel T. Rowe Price Ret 2010 MMXEX 1.03%
MM Sel T. Rowe Price Ret 2020 MMTVX 1.10%
MM Sel T. Rowe Price Ret 2030 MMTQX 1.15%
MM Sel T. Rowe Price Ret 2040 MMFRX 1.21%
MM Sel T. Rowe Price Ret 2050 MMDHX 1.21%
Sel Fndmntl Val (BwHly/BsPt) MFULX 0.93%
MM S&P 500 Index(Northrn Trst) MIEYX 0.47%
Select Eq Opps(Wellington/TRP) MMFVX 1.04%
Sel Gr Opps (Sands/JSP) MAGLX 1.04%
Sel Mid Cap Gr (TRP/Frontier) MMELX 1.01%
Sel Sm Co Value (AB/Am Cent) MMYLX 1.25%
Small Cap Discovery (Invesco) VASCX 1.37%
Premier Global (Invesco) MGFLX 1.17%
EuroPacific Growth (American) RERCX 1.14%

retired@50
Posts: 997
Joined: Tue Oct 01, 2019 2:36 pm

Re: 401K Options Review

Post by retired@50 » Sun Jan 12, 2020 6:49 pm

houseofnine wrote:
Sun Jan 12, 2020 6:43 pm
Hello,

My company offers the following choices in our 401k plan. Based on the BH investing philosophy, these fees seem rather high. Also not a fantastic breadth of choices. Am I looking at this wrong? Please let me know before I storm into the CFOs office and demand satisfaction. FWIW there is a pretty generous match program.

SF Guaranteed
Sel MetWest Total Return Bond MWTRX 0.67%

MM S&P 500 Index(Northrn Trst) MIEYX 0.47%
Use the green funds, and nothing else. Plus, storm into the CFO's office AND demand satisfaction, if you feel comfortable doing that.

Regards,
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

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whodidntante
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Location: outside the echo chamber

Re: 401K Options Review

Post by whodidntante » Sun Jan 12, 2020 6:51 pm

It's expensive, which likely means they are passing the cost of offering the plan on to employees.

I would probably use the S&P 500 fund and possibly also the stable value fund, depending on the yield.

Storming in to the CFO's office and demanding satisfaction sounds like a way to solve the problem, but not the way you think. After you get fired, you can select a company who has a better plan. I lobbied my company for three years before the plan became competitive with the best plans out there.

retired@50
Posts: 997
Joined: Tue Oct 01, 2019 2:36 pm

Re: 401K Options Review

Post by retired@50 » Sun Jan 12, 2020 6:55 pm

whodidntante wrote:
Sun Jan 12, 2020 6:51 pm
It's expensive, which likely means they are passing the cost of offering the plan on to employees.

I would probably use the S&P 500 fund and possibly also the stable value fund, depending on the yield.

Storming in to the CFO's office and demanding satisfaction sounds like a way to solve the problem, but not the way you think. After you get fired, you can select a company who has a better plan. I lobbied my company for three years before the plan became competitive with the best plans out there.
Before getting fired, try this approach...

https://www.bogleheads.org/wiki/How_to_ ... 01(k)_plan
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

Topic Author
houseofnine
Posts: 10
Joined: Sat Jan 11, 2020 4:40 pm

Re: 401K Options Review

Post by houseofnine » Sun Jan 12, 2020 7:14 pm

Thanks all for the advice. I’d actually read the Wiki entry and found it very informative. I’d also read somewhere that the funds in 401k plans can have different fee structures than “retail” but have found no reference to this on the administrator’s site (Mass Mutual). Thanks again!

Topic Author
houseofnine
Posts: 10
Joined: Sat Jan 11, 2020 4:40 pm

Re: 401K Options Review

Post by houseofnine » Sun Jan 12, 2020 7:20 pm

Retired@50 - supposing I choose the two funds you suggest, what suggestions do you have for % of each? I’m 51 and in 22% bracket.

retired@50
Posts: 997
Joined: Tue Oct 01, 2019 2:36 pm

Re: 401K Options Review

Post by retired@50 » Sun Jan 12, 2020 8:19 pm

houseofnine wrote:
Sun Jan 12, 2020 7:20 pm
Retired@50 - supposing I choose the two funds you suggest, what suggestions do you have for % of each? I’m 51 and in 22% bracket.
I'd suggest something like 60% stock / 40% bond or perhaps 70% stock / 30% bond if you're wanting to be more aggressive. At 51, are you still planning on working until 67...??? You'd likely want to be around 60 / 40 by retirement time, or perhaps even 50/50 if you're a conservative investor.

Check out the wiki on asset allocation decisions. It may also depend on your other assets, assuming you have any.

Regards,

https://www.bogleheads.org/wiki/Asset_allocation
Boggle - a game from Parker Brothers. Bogle - investor, founder of Vanguard.

lakpr
Posts: 3411
Joined: Fri Mar 18, 2011 9:59 am

Re: 401K Options Review

Post by lakpr » Sun Jan 12, 2020 8:22 pm

houseofnine wrote:
Sun Jan 12, 2020 7:20 pm
Retired@50 - supposing I choose the two funds you suggest, what suggestions do you have for % of each? I’m 51 and in 22% bracket.
My suggestion would be to do 65:35. I generally suggest Age-10 to Age-15 to Age-20 in bonds (conservative, moderate, aggressive in that order).
To be honest, though, you should think long and deep about your risk tolerance yourself. Asset allocation is a deeply personal choice. When you choose an asset allocation, think what happens if the stock market dives down 50%. If you are invest $100k in a 60:40 portfolio and stock market drops 50%, then you still have $70k of your portfolio left. Can you live with that? If you invest the same $100k in a 70:30 portfolio, under the same 50% drop scenario, you will have only $65k of your portfolio left. Can you live with that? etc.

If you are absolutely risk averse, then a 20:80 portfolio is one that's proven historically to have the lowest risk. Note: not a 100% bonds portfolio, since such portfolio is still subject to inflation risk and interest risk. A 20% allocation to stocks counteracts that risk.

Topic Author
houseofnine
Posts: 10
Joined: Sat Jan 11, 2020 4:40 pm

Re: 401K Options Review

Post by houseofnine » Mon Jan 13, 2020 8:49 pm

lakpr wrote:
Sun Jan 12, 2020 8:22 pm
houseofnine wrote:
Sun Jan 12, 2020 7:20 pm
Retired@50 - supposing I choose the two funds you suggest, what suggestions do you have for % of each? I’m 51 and in 22% bracket.
My suggestion would be to do 65:35. I generally suggest Age-10 to Age-15 to Age-20 in bonds (conservative, moderate, aggressive in that order).
To be honest, though, you should think long and deep about your risk tolerance yourself. Asset allocation is a deeply personal choice. When you choose an asset allocation, think what happens if the stock market dives down 50%. If you are invest $100k in a 60:40 portfolio and stock market drops 50%, then you still have $70k of your portfolio left. Can you live with that? If you invest the same $100k in a 70:30 portfolio, under the same 50% drop scenario, you will have only $65k of your portfolio left. Can you live with that? etc.

If you are absolutely risk averse, then a 20:80 portfolio is one that's proven historically to have the lowest risk. Note: not a 100% bonds portfolio, since such portfolio is still subject to inflation risk and interest risk. A 20% allocation to stocks counteracts that risk.
Thanks a lot for the input. I consider myself fairly risk tolerant and have faith in the market over time. I’ll probably settle on a 65/35 approach, and dial that down gradually over the next 7 years or so.

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Wiggums
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Re: 401K Options Review

Post by Wiggums » Mon Jan 13, 2020 8:56 pm

retired@50 wrote:
Sun Jan 12, 2020 6:49 pm
houseofnine wrote:
Sun Jan 12, 2020 6:43 pm
Hello,

My company offers the following choices in our 401k plan. Based on the BH investing philosophy, these fees seem rather high. Also not a fantastic breadth of choices. Am I looking at this wrong? Please let me know before I storm into the CFOs office and demand satisfaction. FWIW there is a pretty generous match program.

SF Guaranteed
Sel MetWest Total Return Bond MWTRX 0.67%

MM S&P 500 Index(Northrn Trst) MIEYX 0.47%
Use the green funds, and nothing else. Plus, storm into the CFO's office AND demand satisfaction, if you feel comfortable doing that.

Regards,
The funds in green look good to me.

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Stinky
Posts: 2805
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Location: Sweet Home Alabama

Re: 401K Options Review

Post by Stinky » Tue Jan 14, 2020 11:02 am

retired@50 wrote:
Sun Jan 12, 2020 6:49 pm
houseofnine wrote:
Sun Jan 12, 2020 6:43 pm
Hello,

My company offers the following choices in our 401k plan. Based on the BH investing philosophy, these fees seem rather high. Also not a fantastic breadth of choices. Am I looking at this wrong? Please let me know before I storm into the CFOs office and demand satisfaction. FWIW there is a pretty generous match program.

SF Guaranteed
Sel MetWest Total Return Bond MWTRX 0.67%
MM S&P 500 Index(Northrn Trst) MIEYX 0.47%
Use the green funds, and nothing else. Plus, storm into the CFO's office AND demand satisfaction, if you feel comfortable doing that.

Regards,
I agree with using the green funds for now.

Looking way down the road, you might be able to roll some or all of your 401(k) to an IRA when you are 59.5 years old. That is, if your 401(k) plan allows for in-service distributions. You can check into that as you approach that age. (I did that, because my 401(k) choices were very limited.)

Hopefully you'll get better choices of funds before that time. :happy
It's a GREAT day to be alive - Travis Tritt

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