401k Allocations & Emergency Fund/Savings Question

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Topic Author
UtahGetMeTwo
Posts: 7
Joined: Tue May 14, 2024 11:12 am

401k Allocations & Emergency Fund/Savings Question

Post by UtahGetMeTwo »

Hello,

First time poster, recent reader of all things Bogleheads. I have a few questions around my and my wife's 401k allocations, as well as a couple of personal finance questions (mainly around our emergency fund/savings and current bank).

Emergency funds: We have about a year of emergency funds just sitting in a low-yield savings account in BoA.

Debt: Mortgate (2.265%), Car (4.5%)

Tax Filing Status: Married Filing Jointly

Tax Rate: 24% Federal (Marginal), 6.37% State

State of Residence: NJ (work in NYC, so I believe we also pay NY state taxes, but I'm terrible with understanding our taxes...something to work on)

Age: both in our early 40's

Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 10% of stocks

Our current portfolio includes both 401k's and a taxable Vanguard investment account (we don't have any IRA, Roth, or HSA) and is just about $607k, including my $40k pension (wasn't sure if I should include that). Without pension the total is around $567,000.

Current retirement assets

Taxable
2% Vanguard Total Stock Market Index Admiral CL (VTSAX) (0.04%)
4% Travelers (TRV) this is actually several equity awards through my employer

His 401k (Fidelity)
64% Vanguard Target Retirement 2045 Trust Select (I think VTIVX, but VTIVX info looks different from Trust Select in terms of NAV, etc) (0.045%)
Company match? Yes, matches contributions dollar for dollar on the first five (5) percent of eligible pay, up to an annual maximum
of $7,500. The match is paid on an annual basis and is invested in the same funds as my own contributions.


Her 401k (Fidelity)
26%:
Flexpath+Mod 2045 R1 (WFPMDX) (0.3235%)
Stable Value Fund R1 (WSVABX) (0.32%) (Plan on moving this all to Flexpath+Mod 2045 R1 or other as recommended)
Yes, 5%

Her 401k at Vanguard
4% Vanguard Retirement Savings Trust II (n/a) (0.14%) (this is my wife's 401k from her former employer that we haven't rolled over)

_______________________________________________________________

Contributions

New annual Contributions
Will be $24,000 his 401k in 2024 (5% employer matching contributions)
Will be $24,000 her 401k in 2024 (5% employer matching contributions)
Will be $6,000 taxable in 2024 ($500/month automatic deposit, for retirement, not short term goals)

Available funds

Funds available in his 401(k)
Name/Inception Date Expense Ratio
VANGUARD TARGET 2020 06/22/2007
0.045%
VANGUARD TARGET 2025 06/28/2007
0.045%
VANGUARD TARGET 2030 06/28/2007
0.045%
VANGUARD TARGET 2035 06/28/2007
0.045%
VANGUARD TARGET 2040 06/28/2007
0.045%
VANGUARD TARGET 2045 06/28/2007
0.045%
VANGUARD TARGET 2050 06/28/2007
0.045%
VANGUARD TARGET 2055 08/31/2010
0.045%
VANGUARD TARGET 2060 03/01/2012
0.045%
VANGUARD TARGET 2065 07/24/2017
0.045%
VANGUARD TARGET 2070 04/06/2022
0.045%
VANGUARD TARGET INC 06/22/2007
0.045%
JPM LG CAP GROWTH R6 (JLGMX)02/28/1992
0.44%
VANG INST INDEX PLUS (VIIIX)07/31/1990
0.02%
JPM EQUITY INCOME R6 (OIEJX)07/02/1987
0.45%
J H ENTERPRISE N (JDMNX)09/01/1992
0.66%
FID MID CAP IDX (FSMDX)09/08/2011
0.025%
VANG MDCPVAL IDX ADM (VMVAX)08/17/2006
0.07%
FID SMALL CAP GR K6 (FOCSX)05/25/2017
0.6%
NB GENESIS R6 (NRGSX)09/27/1988
0.74%
FID SM CAP IDX (FSSNX)09/08/2011
0.025%
VANG SM VAL IDX INST (VSIIX)05/21/1998
0.06%
AF EUROPAC GROWTH R6 (RERGX)04/16/1984
0.47%
SS W EX US IDX NL A07/29/2011
0.0268%
SS EM MKT IDX NL A09/30/2003
0.0334%
FID PURITAN K6 (FPKFX)06/14/2019
0.32%
AF BOND FD AMER R6 (RBFGX)05/28/1974
0.24%
VANG TOT BD MK IS PL (VBMPX)12/11/1986
0.03%
STABLE VALUE FUND06/30/1996
0.0655%
VANG TREASURY MM (VUSXX)12/14/1992
0.09%

BROKERAGELINK - Click to expand upon your savings plan's investment options with Fidelity BrokerageLink®.


Funds available in her 401(k)
Name/Inception Date Expense Ratio
FID US SUSTN IDX (FITLX) 05/09/2017
0.11%
LRG CAP GRTH III R1 04/21/2022
0.32%
PARNASSUS CORE EQ IS (PRILX )08/31/1992
0.62%
PUTN LARGE CP VAL R1 12/10/2018
0.29%
VANG 500 INDEX ADM (VFIAX) 08/31/1976
0.04%
MID CAP GROWTH R1 12/17/2019
0.5%
VANG MIDCAP IDX ADM (VIMAX) 05/21/1998
0.05%
SMALL CAP GR II R1 08/03/2020
0.64%
VANG SM CAP IDX ADM (VSMAX) 10/03/1960
0.05%
AF GLOBAL GROWTH R6 (RGGGX) 05/18/2012
0.45%
CALV INTL RSP IDX I (CDHIX) 10/30/2015
0.29%
FID EMERGING MKTS K (FKEMX) 11/01/1990
0.74%
FID INTL INDEX (FSPSX) 11/05/1997
0.035%
INTERNATIONAL EQ R1 12/07/2020
0.46%
NTN GL STNBLTY IDX K (NSRKX) 03/05/2008
0.24%
FID GLB COMDTY STK (FFGCX) 03/25/2009
0.86%
VRTS DP REAL EST R6 (VRREX) 03/01/1995
0.79%
FLEXPATH+AGR 2025 R1 12/01/2015
0.3074%
FLEXPATH+AGR 2035 R1 12/01/2015
0.3202%
FLEXPATH+AGR 2045 R1 12/01/2015
0.3275%
FLEXPATH+AGR 2055 R1 12/01/2015
0.3295%
FLEXPATH+AGR 2065 R1 01/07/2022
0.3295%
FLEXPATH+AGR RET R1 12/01/2015
0.3056%
FLEXPATH+CON 2025 R1 07/27/2015
0.2933%
FLEXPATH+CON 2035 R1 07/27/2015
0.3031%
FLEXPATH+CON 2045 R1 07/27/2015
0.3135%
FLEXPATH+CON 2055 R1 07/27/2015
0.3258%
FLEXPATH+CON 2065 R1 01/10/2022
0.3295%
FLEXPATH+CON RET R1 07/24/2015
0.2929%
FLEXPATH+MOD 2025 R1 08/26/2015
0.2974%
FLEXPATH+MOD 2035 R1 08/26/2015
0.3132%
FLEXPATH+MOD 2045 R1 08/26/2015
0.3235%
FLEXPATH+MOD 2055 R1 08/26/2015
0.3293%
FLEXPATH+MOD 2065 R1 12/15/2021
0.3295%
FLEXPATH+MOD RET R1 08/26/2015
0.2952%
TRP CAP APPREC I (TRAIX) 06/30/1986
0.59%
STABLE VALUE FUND R1 03/22/2021
0.32%
BLKRK HIGH YLD BD K (BRHYX) 11/19/1998
0.48%
CORE PLUS BOND II R1 12/22/2021
0.28%
FID INFL PR BD IDX (FIPDX) 05/16/2012
0.05%


Questions:
1. I know I need to get her 401k allocations fixed - definitely take out the Bond allocation since she's also invested in a target retirement fund which also includes bonds. I wasn't sure if I should keep all of her investments in the target 2045 fund, though, especially given the higher expense ratios available through her company on the other funds. We do want to be somewhat aggressive now that we are fairly young still, but maybe not full throttle.

2. Does my Vanguard 2045 Target Retirement fund look okay for now? I do think I could adjust my investments myself manually over time, but don't mind having the target retirement fund do it for me as I get closer to retirement.

3. My last question is regarding our emergency fund. We currently have a LOT of money sitting in a low-yield savings account at BoA (probably over a year's worth of fixed costs in the event we both lost our jobs or something crazy). I'm talking like 0.04% interest here...it's bad. At the same time I've never moved ALL of our money out of a bank and into another one. Is there anything I should know before doing so? We do have several Capital One brick & mortars not too far from where we live which we appreciate in terms of ease of getting cash when needed, and their savings accounts are somewhere in the 4.5% interest zone. We also have a BoA Preferred Rewards credit card that we get extra % back on most purchases since we have >$100k in our account, but I'm not sure if this would be worth it versus a much higher interest rate on a savings account at another bank. Any help here is appreciated.

Thanks!!!
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retired@50
Posts: 13458
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: 401k Allocations & Emergency Fund/Savings Question

Post by retired@50 »

UtahGetMeTwo wrote: Tue May 14, 2024 12:45 pm
Our current portfolio includes both 401k's and a taxable Vanguard investment account
...
Her 401k (Fidelity)
26%:
Flexpath+Mod 2045 R1 (WFPMDX) (0.3235%)
Stable Value Fund R1 (WSVABX) (0.32%) (Plan on moving this all to Flexpath+Mod 2045 R1 or other as recommended)
Yes, 5%


Funds available in her 401(k)
Name/Inception Date Expense Ratio

VANG 500 INDEX ADM (VFIAX) 08/31/1976 0.04%

FID INTL INDEX (FSPSX) 11/05/1997 0.035%

FID INFL PR BD IDX (FIPDX) 05/16/2012 0.05%


Questions:
1. I know I need to get her 401k allocations fixed - definitely take out the Bond allocation since she's also invested in a target retirement fund which also includes bonds. I wasn't sure if I should keep all of her investments in the target 2045 fund, though, especially given the higher expense ratios available through her company on the other funds. We do want to be somewhat aggressive now that we are fairly young still, but maybe not full throttle.

2. Does my Vanguard 2045 Target Retirement fund look okay for now? I do think I could adjust my investments myself manually over time, but don't mind having the target retirement fund do it for me as I get closer to retirement.

3. My last question is regarding our emergency fund. We currently have a LOT of money sitting in a low-yield savings account at BoA (probably over a year's worth of fixed costs in the event we both lost our jobs or something crazy). I'm talking like 0.04% interest here...it's bad. At the same time I've never moved ALL of our money out of a bank and into another one. Is there anything I should know before doing so? We do have several Capital One brick & mortars not too far from where we live which we appreciate in terms of ease of getting cash when needed, and their savings accounts are somewhere in the 4.5% interest zone. We also have a BoA Preferred Rewards credit card that we get extra % back on most purchases since we have >$100k in our account, but I'm not sure if this would be worth it versus a much higher interest rate on a savings account at another bank. Any help here is appreciated.

Thanks!!!
Welcome to the forum.
1. I'd use some combination of the green funds above for "Her 401k". You can read about the nuances of the 3-fund portfolio in the wiki. There's no need to get complicated. US stock / International stock / US bonds. Easy and certainly good enough.
See link: https://www.bogleheads.org/wiki/Three-fund_portfolio

2. Yes, the Vanguard 2045 target date retirement fund is an excellent choice. Low expenses, global diversification.

3. Regarding the emergency fund, I don't know about any of the perks of a BofA preferred rewards credit card, but I can tell you you're missing out on over $5,000 per year in interest based on your $100k balance and the current rates on money market funds. In your situation, since you already have a Vanguard taxable account, I'd transfer the emergency money, or most of it, to the Vanguard Treasury Money Market Fund (VUSXX) at Vanguard. Since the fund holds US Treasury products, most of the interest it creates will be exempt from state income taxes.

See link: https://investor.vanguard.com/investmen ... file/vusxx
The current SEC yield is 5.27%.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
Topic Author
UtahGetMeTwo
Posts: 7
Joined: Tue May 14, 2024 11:12 am

Re: 401k Allocations & Emergency Fund/Savings Question

Post by UtahGetMeTwo »

retired@50 wrote: Tue May 14, 2024 1:11 pm
UtahGetMeTwo wrote: Tue May 14, 2024 12:45 pm
Our current portfolio includes both 401k's and a taxable Vanguard investment account
...
Her 401k (Fidelity)
26%:
Flexpath+Mod 2045 R1 (WFPMDX) (0.3235%)
Stable Value Fund R1 (WSVABX) (0.32%) (Plan on moving this all to Flexpath+Mod 2045 R1 or other as recommended)
Yes, 5%


Funds available in her 401(k)
Name/Inception Date Expense Ratio

VANG 500 INDEX ADM (VFIAX) 08/31/1976 0.04%

FID INTL INDEX (FSPSX) 11/05/1997 0.035%

FID INFL PR BD IDX (FIPDX) 05/16/2012 0.05%


Questions:
1. I know I need to get her 401k allocations fixed - definitely take out the Bond allocation since she's also invested in a target retirement fund which also includes bonds. I wasn't sure if I should keep all of her investments in the target 2045 fund, though, especially given the higher expense ratios available through her company on the other funds. We do want to be somewhat aggressive now that we are fairly young still, but maybe not full throttle.

2. Does my Vanguard 2045 Target Retirement fund look okay for now? I do think I could adjust my investments myself manually over time, but don't mind having the target retirement fund do it for me as I get closer to retirement.

3. My last question is regarding our emergency fund. We currently have a LOT of money sitting in a low-yield savings account at BoA (probably over a year's worth of fixed costs in the event we both lost our jobs or something crazy). I'm talking like 0.04% interest here...it's bad. At the same time I've never moved ALL of our money out of a bank and into another one. Is there anything I should know before doing so? We do have several Capital One brick & mortars not too far from where we live which we appreciate in terms of ease of getting cash when needed, and their savings accounts are somewhere in the 4.5% interest zone. We also have a BoA Preferred Rewards credit card that we get extra % back on most purchases since we have >$100k in our account, but I'm not sure if this would be worth it versus a much higher interest rate on a savings account at another bank. Any help here is appreciated.

Thanks!!!
Welcome to the forum.
1. I'd use some combination of the green funds above for "Her 401k". You can read about the nuances of the 3-fund portfolio in the wiki. There's no need to get complicated. US stock / International stock / US bonds. Easy and certainly good enough.
See link: https://www.bogleheads.org/wiki/Three-fund_portfolio

2. Yes, the Vanguard 2045 target date retirement fund is an excellent choice. Low expenses, global diversification.

3. Regarding the emergency fund, I don't know about any of the perks of a BofA preferred rewards credit card, but I can tell you you're missing out on over $5,000 per year in interest based on your $100k balance and the current rates on money market funds. In your situation, since you already have a Vanguard taxable account, I'd transfer the emergency money, or most of it, to the Vanguard Treasury Money Market Fund (VUSXX) at Vanguard. Since the fund holds US Treasury products, most of the interest it creates will be exempt from state income taxes.

See link: https://investor.vanguard.com/investmen ... file/vusxx
The current SEC yield is 5.27%.

Regards,
Thank you for the reply! Appreciate you looking through "her" investment options and laying out those 3. Totally makes sense.

Wow - I never considered moving our emergency $$$ to a Vanguard money market fund. How does that work logistically, like, if I need to take out $1,000 in cash to pay a landscaper or something like that?
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retired@50
Posts: 13458
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Location: Living in the U.S.A.

Re: 401k Allocations & Emergency Fund/Savings Question

Post by retired@50 »

UtahGetMeTwo wrote: Tue May 14, 2024 1:18 pm
Thank you for the reply! Appreciate you looking through "her" investment options and laying out those 3. Totally makes sense.

Wow - I never considered moving our emergency $$$ to a Vanguard money market fund. How does that work logistically, like, if I need to take out $1,000 in cash to pay a landscaper or something like that?
You can electronically link your Vanguard account to your BofA account(s).

Go to the Vanguard website, login, then click on the little head & shoulders icon "Profile & account settings". There, you'll see a link for "Bank information" then, click on "Add a new bank" if your BofA account isn't already linked.

Once all of this is set, you can sell some shares of the VUSXX fund (as needed) and then specify that you'd like the money deposited in your linked checking or savings account. The money will show up in a couple of business days. If possible, avoid weekends and holidays for quicker transfers.

To initially purchase the VUSXX Treasury money market fund, you may find it easier to initially move the money into your settlement fund, which is also a money market fund, but it's known as the Federal money market fund VMFXX. It doesn't have quite the same advantage as VUSXX at helping you avoid state income taxes.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
Doctor Rhythm
Posts: 3218
Joined: Mon Jan 22, 2018 2:55 am

Re: 401k Allocations & Emergency Fund/Savings Question

Post by Doctor Rhythm »

It’s fine to spread your cash out between different banks and brokerages, and not every penny has to earn optimal interest. Some ideas:

Keep 1 month’s expenses or other sufficiently comfortable sum in a conventional checking account, and link it to your brokerage where the rest of your cash is in a money market fund.

Above, but replace brokerage/MMF with high yield savings account or (if liquidity isn’t a concern) CDs.

Open a Fidelity Cash Management Account:
https://www.bogleheads.org/wiki/Fidelity:_one_stop_shop
Topic Author
UtahGetMeTwo
Posts: 7
Joined: Tue May 14, 2024 11:12 am

Re: 401k Allocations & Emergency Fund/Savings Question

Post by UtahGetMeTwo »

retired@50 wrote: Tue May 14, 2024 1:26 pm You can electronically link your Vanguard account to your BofA account(s).

Go to the Vanguard website, login, then click on the little head & shoulders icon "Profile & account settings". There, you'll see a link for "Bank information" then, click on "Add a new bank" if your BofA account isn't already linked.

Once all of this is set, you can sell some shares of the VUSXX fund (as needed) and then specify that you'd like the money deposited in your linked checking or savings account. The money will show up in a couple of business days. If possible, avoid weekends and holidays for quicker transfers.

To initially purchase the VUSXX Treasury money market fund, you may find it easier to initially move the money into your settlement fund, which is also a money market fund, but it's known as the Federal money market fund VMFXX. It doesn't have quite the same advantage as VUSXX at helping you avoid state income taxes.

Regards,
Ahh, got it, duh. Yes, we are already linked to BoA through Vanguard because of our personal investment fund.

Some more questions (that I know my wife will ask me):
Is VUSXX federally insured?
Any feedback on Capital One vs BoA as the "home base" bank? For our BoA credit card we get 1.75% rewards on all spend, PLUS 3% (so, 4.75% total) on a chosen category up to $2,500 quarterly, and I believe 2% plus the 1.75% for grocery spend.
For a "home base" bank it would also be ideal to be able to make sub-accounts under our main savings account to track our savings goals for certain things (like vacations, specific home improvements, etc).
Topic Author
UtahGetMeTwo
Posts: 7
Joined: Tue May 14, 2024 11:12 am

Re: 401k Allocations & Emergency Fund/Savings Question

Post by UtahGetMeTwo »

Doctor Rhythm wrote: Tue May 14, 2024 1:37 pm It’s fine to spread your cash out between different banks and brokerages, and not every penny has to earn optimal interest. Some ideas:

Keep 1 month’s expenses or other sufficiently comfortable sum in a conventional checking account, and link it to your brokerage where the rest of your cash is in a money market fund.

Above, but replace brokerage/MMF with high yield savings account or (if liquidity isn’t a concern) CDs.

Open a Fidelity Cash Management Account:
https://www.bogleheads.org/wiki/Fidelity:_one_stop_shop
Thanks! Never considered all of these different options. Very eye-opening.
User avatar
retired@50
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Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: 401k Allocations & Emergency Fund/Savings Question

Post by retired@50 »

UtahGetMeTwo wrote: Tue May 14, 2024 2:08 pm
retired@50 wrote: Tue May 14, 2024 1:26 pm You can electronically link your Vanguard account to your BofA account(s).

Go to the Vanguard website, login, then click on the little head & shoulders icon "Profile & account settings". There, you'll see a link for "Bank information" then, click on "Add a new bank" if your BofA account isn't already linked.

Once all of this is set, you can sell some shares of the VUSXX fund (as needed) and then specify that you'd like the money deposited in your linked checking or savings account. The money will show up in a couple of business days. If possible, avoid weekends and holidays for quicker transfers.

To initially purchase the VUSXX Treasury money market fund, you may find it easier to initially move the money into your settlement fund, which is also a money market fund, but it's known as the Federal money market fund VMFXX. It doesn't have quite the same advantage as VUSXX at helping you avoid state income taxes.

Regards,
Ahh, got it, duh. Yes, we are already linked to BoA through Vanguard because of our personal investment fund.

Some more questions (that I know my wife will ask me):
Is VUSXX federally insured?
Any feedback on Capital One vs BoA as the "home base" bank? For our BoA credit card we get 1.75% rewards on all spend, PLUS 3% (so, 4.75% total) on a chosen category up to $2,500 quarterly, and I believe 2% plus the 1.75% for grocery spend.
For a "home base" bank it would also be ideal to be able to make sub-accounts under our main savings account to track our savings goals for certain things (like vacations, specific home improvements, etc).
Is VUSXX federally insured? <- No, not in the same sense as FDIC insurance on a bank account. But, since the fund holds US Treasury bills and US Government Obligations, the government would have to default on one of those before you'd lose any money. Worrying about this is paranoid in my book.

You can do whatever you want as far as cash management goes, I don't have a strong opinion here about Capital One or BofA.

I suppose if you play the game just right, and spend a lot of money on your credit card, etc. then there are benefits. However, I think if you have $100k in a Merrill Edge self-directed brokerage account you'll also qualify for these "BofA rewards" but you could just hold some VTI shares and never trade. That way you're not really having to put up with sub-standard returns on your cash. BofA / Merrill Edge can't reduce the dividend yield on VTI and they can't make you trade.

As for the sub-accounts, I'd use a spreadsheet instead. I find fewer accounts easier to deal with.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
TopDawgs23
Posts: 6
Joined: Sat Mar 02, 2024 12:30 pm

Re: 401k Allocations & Emergency Fund/Savings Question

Post by TopDawgs23 »

If you invest in money market funds, you should consider doing so in an account with Merrill Edge as those assets will still count towards you BOA rewards tier. Also check to see if they are offering a sign up bonus.
Topic Author
UtahGetMeTwo
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Joined: Tue May 14, 2024 11:12 am

Re: 401k Allocations & Emergency Fund/Savings Question

Post by UtahGetMeTwo »

Thank you, all! This is very helpful!
tashnewbie
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Joined: Thu Apr 23, 2020 12:44 pm

Re: 401k Allocations & Emergency Fund/Savings Question

Post by tashnewbie »

I agree that if you want to retain Platinum Honors on BoA credit card, you should move the money to Merrill Edge. You could buy a money market fund there. Check to see which ones don't have transaction fees. VUSXX may be one of those.
Topic Author
UtahGetMeTwo
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Joined: Tue May 14, 2024 11:12 am

Re: 401k Allocations & Emergency Fund/Savings Question

Post by UtahGetMeTwo »

tashnewbie wrote: Tue May 14, 2024 3:26 pm I agree that if you want to retain Platinum Honors on BoA credit card, you should move the money to Merrill Edge. You could buy a money market fund there. Check to see which ones don't have transaction fees. VUSXX may be one of those.
Makes sense. Any suggestions on Merrill Edge MMF's in case VUSXX isn't available (I haven't been able to set up a Merrill Edge account yet to see if it's an option).

Would GOTXX or TTTFF be worth it even if the fees are around 0.19%? Practically, if I move even half of our emergency fund to another brokerage (e.g. Vanguard for VUSXX) we would lose the Platinum Honors status. How do I calculate if that's worth it based on the Platinum Honors rewards vs. returns/expense ratios at a brokerage other than ME?
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retired@50
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Re: 401k Allocations & Emergency Fund/Savings Question

Post by retired@50 »

UtahGetMeTwo wrote: Thu May 16, 2024 10:36 am
Would GOTXX or TTTFF be worth it even if the fees are around 0.19%?
When shopping for a money market fund, and only a money market fund, you can ignore the expense ratio. Pay attention to the 7 day SEC Yield, as this number will already take the ER into account.

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
tashnewbie
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Re: 401k Allocations & Emergency Fund/Savings Question

Post by tashnewbie »

UtahGetMeTwo wrote: Thu May 16, 2024 10:36 am
tashnewbie wrote: Tue May 14, 2024 3:26 pm I agree that if you want to retain Platinum Honors on BoA credit card, you should move the money to Merrill Edge. You could buy a money market fund there. Check to see which ones don't have transaction fees. VUSXX may be one of those.
Makes sense. Any suggestions on Merrill Edge MMF's in case VUSXX isn't available (I haven't been able to set up a Merrill Edge account yet to see if it's an option).

Would GOTXX or TTTFF be worth it even if the fees are around 0.19%? Practically, if I move even half of our emergency fund to another brokerage (e.g. Vanguard for VUSXX) we would lose the Platinum Honors status. How do I calculate if that's worth it based on the Platinum Honors rewards vs. returns/expense ratios at a brokerage other than ME?
No suggestions because I've never used ME and don't know what's available.

When I said transaction fees, I wasn't referring to expense ratio. I was talking about whether ME charges a fee to buy and sell the particular fund. I have heard that some mutual funds are transaction-free at ME and others are not. You'd just want to confirm that the one you want to use does not have any.

As @retired@50 said above, you can ignore expense ratio when selecting a money market fund because the return is net, after expenses.

You'll have to determine the value of the Platinum Honors to you. I think value would depend on credit card spend and categories. Compare that to any extra yield you might get from a particular money market fund. At the end of the day you may not need to do this, because if VUSXX is transaction-free at ME, you can have both the MMF and the Platinum Honors.
Topic Author
UtahGetMeTwo
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Re: 401k Allocations & Emergency Fund/Savings Question

Post by UtahGetMeTwo »

Thanks, again!
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