First Big Job 401k, question about 401k allocation

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samsandhu88
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Joined: Sun Jan 12, 2020 11:08 pm

First Big Job 401k, question about 401k allocation

Post by samsandhu88 » Sun Jan 12, 2020 11:26 pm

Hello

I will soon be starting my first big job after finishing up my training and plan to max out my 401k every year. Currently I have a ROTH IRA which I have maxed out the past 2 years with 90% in QQQ and 10% in SWAGX. Also have a taxable account with about 10k in VTI.

At my new job the 401k will be with schwab and the funds that I have available to me are:

-Schwab Savings Bank Fund
-Short Term Bond ETF (SCPB)
-PIMCO Total Return ETF (BOND)
-Vanguard Real Estate Index ETF (VNQ)
-Schwab International Index ETF (SCHF)
-Schwab Large Cap Value Index ETF (SCHV)
-Vanguard Small Cap Value Index ETF (VBR)
-Schwab U.S. Broad Market ETF (SCHB)
-Schwab Small Cap Index ETF (SCHA)
-Schwab Large Cap Growth Index ETF (SCHG)
-Vanguard Small Cap Growth Index ETF (VBK)
-Vanguard Emerging Markets International Index ETF (VWO)

I just turned 30 and like i said this is my first high paying job and I would like to be fairly aggressive with my portfolio. Given the options available what recommendations do you guys have as far as fund allocations that gives me a wide diversity and also prevents me from investing in multiple funds that are fairly similar to each other?

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Duckie
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Joined: Thu Mar 08, 2007 2:55 pm
Location: California Bay Area

Re: First Big Job 401k, question about 401k allocation

Post by Duckie » Mon Jan 13, 2020 9:05 pm

samsandhu88, welcome to the forum.
samsandhu88 wrote:I have a ROTH IRA which I have maxed out the past 2 years with 90% in QQQ and 10% in SWAGX. Also have a taxable account with about 10k in VTI.
SWAGX is a good bond fund but in general it's better to put assets with higher expected growth (stocks) in Roth accounts and assets with lower expected growth (bonds) in pre-tax accounts. That's because you've already paid the taxes in the Roth accounts so future growth is tax-free. So avoid putting bonds in Roth accounts.
Given the options available what recommendations do you guys have as far as fund allocations that gives me a wide diversity and also prevents me from investing in multiple funds that are fairly similar to each other?
Without knowing the plan expense ratios (edit your post and add them) the best options appear to be:
  • Schwab U.S. Broad Market ETF (SCHB) -- Complete US stocks
  • Schwab International Index ETF (SCHF) -- Developed markets -- 75% of international stocks
  • Short Term Bond ETF (SPSB) -- Short-term US bonds
PIMCO Total Return is a good bond fund but at retail 0.73% it's a lot more expensive than the SPSB ETF at retail 0.07%. (The only thing I could find about SCPB was that it changed its ticker, so it's probably SPSB now.)

What is the current rate on the Schwab Savings Bank Fund?

Since SCHF is a limited international fund you could put VXUS in your Roth IRA to cover part of your international AA.

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Re: First Big Job 401k, question about 401k allocation

Post by Flyer24 » Mon Jan 13, 2020 9:09 pm

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