New 401(k) Provider - Empower Retirement

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remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Tue Sep 12, 2017 10:01 am

Hey everyone!

The company I am working finally got a 401k through Empower Retirement and offering match at 4% of eligible earnings with no vesting period for employees hired before a certain date which I fall under. Obviously I want to take advantage of this match which brings me here.

Emergency funds: $20k (4 months)
IRAs or brokerage accounts: IRA: $20k
Debt: ~2k in credit card, paid off in full every month
Tax Filing Status: Married Filing Jointly
Tax Rate: 25% Federal, 0 % State
Combined Income: ~110k
State of Residence: Texas
Age: 30
Desired Asset allocation: Good Mix, Medium / High risk tolerance at this point in life. Sure to change down the road.

Fund Choices:

Invesment T. Rowe Price Global Technology
Asset Class International Funds
Gross Exp % 0.90%
Invesment T. Rowe Price Spectrum Intenational
Asset Class International Funds
Gross Exp % 0.94%
Invesment Vanguard Emerging Mkts Stock Idx Adm
Asset Class International Funds
Gross Exp % 0.14%
Invesment Vanguard Total Intl Stock Index Admiral
Asset Class International Funds
Gross Exp % 0.11%
Invesment Vanguard REIT Index Adm
Asset Class Specialty
Gross Exp % 0.12%
Invesment Vanguard Small Cap Index Adm
Asset Class Small Cap Funds
Gross Exp % 0.06%
Invesment MassMutual Select Mid Cap Growth R5
Asset Class Mid Cap Funds
Gross Exp % 0.83%
Invesment Vanguard Mid Cap Index Fund - Admiral
Asset Class Mid Cap Funds
Gross Exp % 0.06%
Invesment Victory Sycamore Established Value R6
Asset Class Mid Cap Funds
Gross Exp % 0.59%
Invesment iShares S&P 500 Index K
Asset Class Large Cap Funds
Gross Exp % 0.04%
Invesment MFS Growth R6
Asset Class Large Cap Funds
Gross Exp % 0.62%
Invesment Putnam Equity Income R6
Asset Class Large Cap Funds
Gross Exp % 0.56%
Invesment Vanguard Growth Index Adm
Asset Class Large Cap Funds
Gross Exp % 0.06%
Invesment Vanguard Value Index Adm
Asset Class Large Cap Funds
Gross Exp % 0.06%
Invesment JHancock Bond R6
Asset Class Bond Funds
Gross Exp % 0.52%
Invesment PIMCO Income Instl
Asset Class Bond Funds
Gross Exp % 0.48%
Invesment Templeton Global Bond Adv
Asset Class Bond Funds
Gross Exp % 0.74%
Invesment Key Guaranteed Portfolio Fund
Asset Class Fixed
Gross Exp % N/A
Last edited by remasteredx2 on Wed Sep 13, 2017 10:30 am, edited 1 time in total.

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ruralavalon
Posts: 11677
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New 401(k) Provider - Empower Retirement

Post by ruralavalon » Tue Sep 12, 2017 3:31 pm

Welcome to the forum :) .

Do you have any other accounts, such as IRAs or brokerage accounts? If so what investments do you have in the bbc.co other accounts?

Often it's better to treat all accounts together as a single unified whole, rather than just look at one account individually.

You can simply add this to your original post using the edit button, it helps a lot if all of your information is in one place.

At age 30 I suggest about 20% in bonds.

I suggest around 20-30% of stocks in international stocks.

That works out to about 20% bonds, 20% international stocks and 60% domestic stocks.

If the 401k is your only account then I suggest using these funds:
60%, iShares S&P 500 Index K, ER 0.04%
20%, Vanguard International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
20%, PIMCO Total Return Institutional (PTTRX) ER 0.48%
Last edited by ruralavalon on Tue Sep 12, 2017 3:37 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

petulant
Posts: 241
Joined: Thu Sep 22, 2016 1:09 pm

Re: New 401(k) Provider - Empower Retirement

Post by petulant » Tue Sep 12, 2017 3:37 pm

Do they not offer any target retirement funds?

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Wed Sep 13, 2017 10:23 am

petulant wrote:
Tue Sep 12, 2017 3:37 pm
Do they not offer any target retirement funds?
Hi Petulant - Yes they do. It's the following series - TIAA-CREF Lifecycle Index 2010 Inst - through TIAA-CREF Lifecycle Index 2060 Instl

I didn't list them thinking it would be better to select some funds on my own per the advise of many people. Do you disagree?
Last edited by remasteredx2 on Wed Sep 13, 2017 10:43 am, edited 1 time in total.

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Wed Sep 13, 2017 10:39 am

ruralavalon wrote:
Tue Sep 12, 2017 3:31 pm
Welcome to the forum :) .

Do you have any other accounts, such as IRAs or brokerage accounts? If so what investments do you have in the bbc.co other accounts?

Often it's better to treat all accounts together as a single unified whole, rather than just look at one account individually.

You can simply add this to your original post using the edit button, it helps a lot if all of your information is in one place.

At age 30 I suggest about 20% in bonds.

I suggest around 20-30% of stocks in international stocks.

That works out to about 20% bonds, 20% international stocks and 60% domestic stocks.

If the 401k is your only account then I suggest using these funds:
60%, iShares S&P 500 Index K, ER 0.04%
20%, Vanguard International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
20%, PIMCO Total Return Institutional (PTTRX) ER 0.48%
Thanks ruralavalon! I've updated the information. Unfortunately, I'm starting a bit late due to extraordinary expenses the last decade but the wifey and I are in a good position in the sense that we have no debts so we can start putting that towards . I have an IRA with Fidelity. The funds are just parked there and not invested in anything. This is what was moved over from an earlier 401k with a previous employer. I need to invest that as well ASAP

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ruralavalon
Posts: 11677
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New 401(k) Provider - Empower Retirement

Post by ruralavalon » Wed Sep 13, 2017 2:17 pm

remasteredx2 wrote:
Wed Sep 13, 2017 10:39 am
ruralavalon wrote:
Tue Sep 12, 2017 3:31 pm
Welcome to the forum :) .

Do you have any other accounts, such as IRAs or brokerage accounts? If so what investments do you have in the bbc.co other accounts?

Often it's better to treat all accounts together as a single unified whole, rather than just look at one account individually.

You can simply add this to your original post using the edit button, it helps a lot if all of your information is in one place.

At age 30 I suggest about 20% in bonds.

I suggest around 20-30% of stocks in international stocks.

That works out to about 20% bonds, 20% international stocks and 60% domestic stocks.

If the 401k is your only account then I suggest using these funds:
60%, iShares S&P 500 Index K, ER 0.04%
20%, Vanguard International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
20%, PIMCO Total Return Institutional (PTTRX) ER 0.48%
Thanks ruralavalon! I've updated the information. Unfortunately, I'm starting a bit late due to extraordinary expenses the last decade but the wifey and I are in a good position in the sense that we have no debts so we can start putting that towards . I have an IRA with Fidelity. The funds are just parked there and not invested in anything. This is what was moved over from an earlier 401k with a previous employer. I need to invest that as well ASAP
About how much (in dollars) do you expect that you may be able to contribute to investing annually (total, all accounts)?

Also about how much (in dollars) is the maximum annual employer match offered in your 401k?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Wed Sep 13, 2017 2:53 pm

ruralavalon wrote:
Tue Sep 12, 2017 3:31 pm

About how much (in dollars) do you expect that you may be able to contribute to investing annually (total, all accounts)?
- Thinking conservatively and at current income, I'm looking to invest at least ~15k up to 25k annually

Also about how much (in dollars) is the maximum annual employer match offered in your 401k?
- It's tied to salary so 2.4k at the moment

User avatar
ruralavalon
Posts: 11677
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New 401(k) Provider - Empower Retirement

Post by ruralavalon » Wed Sep 13, 2017 4:24 pm

remasteredx2 wrote:
Wed Sep 13, 2017 10:39 am
ruralavalon wrote:
Tue Sep 12, 2017 3:31 pm
Welcome to the forum :) .

Do you have any other accounts, such as IRAs or brokerage accounts? If so what investments do you have in the bbc.co other accounts?

Often it's better to treat all accounts together as a single unified whole, rather than just look at one account individually.

You can simply add this to your original post using the edit button, it helps a lot if all of your information is in one place.

At age 30 I suggest about 20% in bonds.

I suggest around 20-30% of stocks in international stocks.

That works out to about 20% bonds, 20% international stocks and 60% domestic stocks.

If the 401k is your only account then I suggest using these funds:
60%, iShares S&P 500 Index K, ER 0.04%
20%, Vanguard International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
20%, PIMCO Total Return Institutional (PTTRX) ER 0.48%
Thanks ruralavalon! I've updated the information. Unfortunately, I'm starting a bit late due to extraordinary expenses the last decade but the wifey and I are in a good position in the sense that we have no debts so we can start putting that towards . I have an IRA with Fidelity. The funds are just parked there and not invested in anything. This is what was moved over from an earlier 401k with a previous employer. I need to invest that as well ASAP
remasteredx2 wrote:
Wed Sep 13, 2017 2:53 pm
ruralavalon wrote:
Tue Sep 12, 2017 3:31 pm

About how much (in dollars) do you expect that you may be able to contribute to investing annually (total, all accounts)?
- Thinking conservatively and at current income, I'm looking to invest at least ~15k up to 25k annually

Also about how much (in dollars) is the maximum annual employer match offered in your 401k?
- It's tied to salary so 2.4k at the moment
Accounts and priority.
I suggest opening two IRAs at a low cost provider like Fidelity, one for you and one for your spouse, and contributing the maximum $5.5/yr to each. This gives you access to a greater variety of low expense ratio index funds than are available in your 401k.

Since you are in the 25% tax bracket I suggest traditional IRAs rather than Roth IRAs. Please see the wiki article "traditional vs Roth".

I suggest that you contribute the remainder, $4-14k/yr, to your 401k.


Fund selection.
I suggest striving for a good combination of broad diversification (to decrease your risk) and low expense ratios (to increase your net gain). A simple way to achieve both goals is to use the three-fund portfolio being -- total stock market, total international stock and total bond market. Please see the wiki article "three-fund portfolio" and the forum discussion on the same topic.

Currently all of your investable money is in your rollover IRA at Fidelity. I suggest initially investing that $20k in Fidelity Four-in-One Fund (FFONX) ER 0.11%. It is very diversified covering both domestic and international stocks, as well as bonds. It has a very low expense ratio. That's a good way to start the rollover IRA, immediately giving you a very broadly diversified portfolio at the outset. As the other accounts grow with your new contributions, then you can switch this account to separate index funds.

I suggest the three funds I listed earlier for your 401k. iShares 500 Index Fund is a good substitute for a domestic total stock market index fund, it covers 81% of the domestic stock market and S&P 500 funds have had nearly identical performance to a total stock market index fund. PIMCO Total Return Institutional (PTTRX) is a good actively managed intermediate-term bond fund with a moderate expense ratio. (In both instances I would prefer a total market index fund if available, so I suggest using total market funds in the new IRAs.)

In the two new IRAs at a Fidelity I suggest using Fidelity Total Market Index Fund (FSTMX or later FSTVX) and Fidelity U.S. Aggregate Bond Index Fund (FBIDX or later FSITX), so that as you go forward you have to rely less on the 500 Index Fund and the PIMCO fund in your 401k. Start with the Investor Class shares with an initial minimum of $2.5k, later switch to the Premium Class shares which have lower expense ratios.


Example portfolio.
Here is an example portfolio you could consider as a start. This is a three-fund type portfolio modified to accommodate what is offered in your 401k. (It's hard to specify exactly how to distribute the new contributions initially, given the large range of possibilities for the annual contributions.)

your rollover IRA @ Fidelity ($20k)
Fidelity Four-in-One Index Fund (FFNOX) ER 0.11%

your 401k ($00k; adds $4-14k/yr + $2.4k employer match = $6.4k-16.4k/yr total)
iShares S&P 500 Index Fund K, ER 0.04%
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
PIMCO Total Return Institutional (PTTRX) ER 0.48%
(Initially you may want all contributions to go into the two stock funds.)

your traditional IRA @ Fidelity (00% of current portfolio; $00k; adds $5.5k/yr)
Fidelity Total Market Index Fund (FSTMX) ER 0.09%
Fidelity U.S. Aggregate Bond Index Fund (FBIDX) ER 0.14%

spousal traditional IRA @ Fidelity (00% of current portfolio; $00k; adds $5.5k/yr)
Fidelity Total Market Index Fund (FSTMX) ER 0.09%
Fidelity U.S. Aggregate Bond Index Fund (FBIDX) ER 0.14%


. . . . .

If you have any questions just ask.

I hope that this helps.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Wed Sep 13, 2017 10:22 pm

ruralavalon wrote:
Wed Sep 13, 2017 4:24 pm
remasteredx2 wrote:
Wed Sep 13, 2017 10:39 am
ruralavalon wrote:
Tue Sep 12, 2017 3:31 pm
Welcome to the forum :) .

Do you have any other accounts, such as IRAs or brokerage accounts? If so what investments do you have in the bbc.co other accounts?

Often it's better to treat all accounts together as a single unified whole, rather than just look at one account individually.

You can simply add this to your original post using the edit button, it helps a lot if all of your information is in one place.

At age 30 I suggest about 20% in bonds.

I suggest around 20-30% of stocks in international stocks.

That works out to about 20% bonds, 20% international stocks and 60% domestic stocks.

If the 401k is your only account then I suggest using these funds:
60%, iShares S&P 500 Index K, ER 0.04%
20%, Vanguard International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
20%, PIMCO Total Return Institutional (PTTRX) ER 0.48%
Thanks ruralavalon! I've updated the information. Unfortunately, I'm starting a bit late due to extraordinary expenses the last decade but the wifey and I are in a good position in the sense that we have no debts so we can start putting that towards . I have an IRA with Fidelity. The funds are just parked there and not invested in anything. This is what was moved over from an earlier 401k with a previous employer. I need to invest that as well ASAP
remasteredx2 wrote:
Wed Sep 13, 2017 2:53 pm
ruralavalon wrote:
Tue Sep 12, 2017 3:31 pm

About how much (in dollars) do you expect that you may be able to contribute to investing annually (total, all accounts)?
- Thinking conservatively and at current income, I'm looking to invest at least ~15k up to 25k annually

Also about how much (in dollars) is the maximum annual employer match offered in your 401k?
- It's tied to salary so 2.4k at the moment
Accounts and priority.
I suggest opening two IRAs at a low cost provider like Fidelity, one for you and one for your spouse, and contributing the maximum $5.5/yr to each. This gives you access to a greater variety of low expense ratio index funds than are available in your 401k.

Since you are in the 25% tax bracket I suggest traditional IRAs rather than Roth IRAs. Please see the wiki article "traditional vs Roth".

I suggest that you contribute the remainder, $4-14k/yr, to your 401k.


Fund selection.
I suggest striving for a good combination of broad diversification (to decrease your risk) and low expense ratios (to increase your net gain). A simple way to achieve both goals is to use the three-fund portfolio being -- total stock market, total international stock and total bond market. Please see the wiki article "three-fund portfolio" and the forum discussion on the same topic.

Currently all of your investable money is in your rollover IRA at Fidelity. I suggest initially investing that $20k in Fidelity Four-in-One Fund (FFONX) ER 0.11%. It is very diversified covering both domestic and international stocks, as well as bonds. It has a very low expense ratio. That's a good way to start the rollover IRA, immediately giving you a very broadly diversified portfolio at the outset. As the other accounts grow with your new contributions, then you can switch this account to separate index funds.

I suggest the three funds I listed earlier for your 401k. iShares 500 Index Fund is a good substitute for a domestic total stock market index fund, it covers 81% of the domestic stock market and S&P 500 funds have had nearly identical performance to a total stock market index fund. PIMCO Total Return Institutional (PTTRX) is a good actively managed intermediate-term bond fund with a moderate expense ratio. (In both instances I would prefer a total market index fund if available, so I suggest using total market funds in the new IRAs.)

In the two new IRAs at a Fidelity I suggest using Fidelity Total Market Index Fund (FSTMX or later FSTVX) and Fidelity U.S. Aggregate Bond Index Fund (FBIDX or later FSITX), so that as you go forward you have to rely less on the 500 Index Fund and the PIMCO fund in your 401k. Start with the Investor Class shares with an initial minimum of $2.5k, later switch to the Premium Class shares which have lower expense ratios.


Example portfolio.
Here is an example portfolio you could consider as a start. This is a three-fund type portfolio modified to accommodate what is offered in your 401k. (It's hard to specify exactly how to distribute the new contributions initially, given the large range of possibilities for the annual contributions.)

your rollover IRA @ Fidelity ($20k)
Fidelity Four-in-One Index Fund (FFNOX) ER 0.11%

your 401k ($00k; adds $4-14k/yr + $2.4k employer match = $6.4k-16.4k/yr total)
iShares S&P 500 Index Fund K, ER 0.04%
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
PIMCO Total Return Institutional (PTTRX) ER 0.48%
(Initially you may want all contributions to go into the two stock funds.)

your traditional IRA @ Fidelity (00% of current portfolio; $00k; adds $5.5k/yr)
Fidelity Total Market Index Fund (FSTMX) ER 0.09%
Fidelity U.S. Aggregate Bond Index Fund (FBIDX) ER 0.14%

spousal traditional IRA @ Fidelity (00% of current portfolio; $00k; adds $5.5k/yr)
Fidelity Total Market Index Fund (FSTMX) ER 0.09%
Fidelity U.S. Aggregate Bond Index Fund (FBIDX) ER 0.14%


. . . . .

If you have any questions just ask.

I hope that this helps.
That is incredibly helpful! I will take a look at it and comment tomorrow along with some other funds I have been researching.

In the meantime, what's the difference between the traditional IRA and the rollover IRA? I was under the assumption that the funds from the previous 401K was rolled over to my traditional IRA.

Why should I do investor class over premium class, assuming I have the minimum required to invest in premium?

Thank you for all the suggestions so far!

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ruralavalon
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Location: Illinois

Re: New 401(k) Provider - Empower Retirement

Post by ruralavalon » Thu Sep 14, 2017 9:09 am

Yes you could make your $5.5k/yr IRA contributions to the existing traditional rollover IRA instead of starting a new traditional IRA for yourself.

Do you have a significant lump sum of cash you could add to investing in the next 4-5 months? Such as $5.5k now to a spousal IRA for the 2017 contribution, and another $5.5k in January for the 2018 contribution to the spousal IRA?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Fri Sep 15, 2017 7:39 pm

ruralavalon wrote:
Thu Sep 14, 2017 9:09 am
Yes you could make your $5.5k/yr IRA contributions to the existing traditional rollover IRA instead of starting a new traditional IRA for yourself.

Do you have a significant lump sum of cash you could add to investing in the next 4-5 months? Such as $5.5k now to a spousal IRA for the 2017 contribution, and another $5.5k in January for the 2018 contribution to the spousal IRA?
I can invest 20k for the spousal IRA / My IRA / and 401k right now. 2018 contributions will be sometime in Q2 2018.

I have added some additional funds to the list to be narrowed down.

401K
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%
iShares S&P 500 Index Fund K (WFSPX), ER
0.04%
PIMCO Total Return Institutional (PTTRX) ER 0.46% - I don't have access to this fund on my 401k. Do you have another option I can utilize?

Traditional IRA - fund option - to narrow down to 2-3 funds :
Fidelity Four-in-One Index Fund (FFNOX) ER 0.11%
Fidelity Total International Index Fund - Premium Class (FTIPX) ER 0.1%
Fidelity U.S. Aggregate Bond Index Fund Investor Class (FBIDX) ER 0.14%
Fidelity U.S. Bond Index Fund - Premium Class (FSITX) ER 0.045%
Fidelity U.S. Bond Index Fund - Institutional Class (FXSTX) ER 0.035%
Fidelity Total Market Index Fund Investor Class (FSTMX) ER 0.09%
Fidelity Total Market Index Fund - Premium Class (FSTVX) ER 0.035%

Spouse Traditional IRA
Fidelity Total Market Index Fund Investor Class (FSTMX) ER 0.09%
Fidelity U.S. Aggregate Bond Index Fund Investor Class (FBIDX) ER 0.14%

Any thoughts?

Thank you,

petulant
Posts: 241
Joined: Thu Sep 22, 2016 1:09 pm

Re: New 401(k) Provider - Empower Retirement

Post by petulant » Sat Sep 16, 2017 8:45 am

remasteredx2 wrote:
Wed Sep 13, 2017 10:23 am
petulant wrote:
Tue Sep 12, 2017 3:37 pm
Do they not offer any target retirement funds?
Hi Petulant - Yes they do. It's the following series - TIAA-CREF Lifecycle Index 2010 Inst - through TIAA-CREF Lifecycle Index 2060 Instl

I didn't list them thinking it would be better to select some funds on my own per the advise of many people. Do you disagree?
I wouldn't assume that all target retirement date funds are bad. I've got a 457 through Great West and Empower Retirement that offers Vanguard funds, which blow away all other options in my set. It's got a .17 overall expense ratio with acceptable allocations to stock/int'l/bonds.

Here's an information sheet for the 2040 TIAA-CREF fund: https://media.tiaa-cref.org/isswc/TIAA- ... rement.pdf

Holy cow, that's horrible. Who comes up with these asset allocations, and those expense ratios, yikes!

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ruralavalon
Posts: 11677
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New 401(k) Provider - Empower Retirement

Post by ruralavalon » Sat Sep 16, 2017 11:29 am

What is the return currently being paid on the Key Guaranteed Portfolio in your 401k?

You cannot make a contribution to your 401k from the $20k you have now, you can contribute to your 401k only by deductions from payroll at work.

Do you currently have anything in the 401k? If so how much?

About how much do you think you may be contributing per month to the 401k?

How much have you contributed so far this year to your IRA?

There are initial minimum investments required for each fund in an IRA.

In your traditional rollover IRA the share class to use depends entirely on the amounts you will start with in each fund in that account. If $2500 or more in a fund then it's Investor Class. If it's $10,000 or more in a fund then it's Premium Class. You don't have enough money to use Institutional Class.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Tue Sep 19, 2017 11:08 am

ruralavalon wrote:
Sat Sep 16, 2017 11:29 am
What is the return currently being paid on the Key Guaranteed Portfolio in your 401k? Doesn't say. It goes to this webpage https://awrd.morningstar.com/SBT/Tools/ ... =NO_TICKER

Viewing: Rate of Return (as of 31-Aug-2017 ) N/A N/A N/A N/A

So I'm not sure what this is at all :|


You cannot make a contribution to your 401k from the $20k you have now, you can contribute to your 401k only by deductions from payroll at work. gotcha, I knew that but it slipped my mind.

Do you currently have anything in the 401k? If so how much? $0 currently. This is the first year they are offering.

About how much do you think you may be contributing per month to the 401k? I would like to contribute atleast $1000 per month out of my paycheck. There's 6 pay periods left in the year so I have it set to take out 733 per pay period to get the full 4% match for the year. After that, I want to contribute atleast $500 per pay period which adds up to 12k per year

How much have you contributed so far this year to your IRA? $0, Will put in 5.5k by the end of this exercise.

There are initial minimum investments required for each fund in an IRA.

In your traditional rollover IRA the share class to use depends entirely on the amounts you will start with in each fund in that account. If $2500 or more in a fund then it's Investor Class. If it's $10,000 or more in a fund then it's Premium Class. You don't have enough money to use Institutional Class. - that cleared it up, thank you!
This is what the draft portfolio looks like:
401K
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11% (50%)
iShares S&P 500 Index Fund K (WFSPX), ER 0.04% (50%)

Traditional IRA
Fidelity Total Market Index Fund Investor Class (FSTMX) ER 0.09%
Fidelity U.S. Bond Index Fund - Premium Class (FSITX) ER 0.045%

Spouse Traditional IRA
Fidelity Total Market Index Fund Investor Class (FSTMX) ER 0.09%
Fidelity U.S. Aggregate Bond Index Fund Investor Class (FBIDX) ER 0.14%

What do you think?

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ruralavalon
Posts: 11677
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Location: Illinois

Re: New 401(k) Provider - Empower Retirement

Post by ruralavalon » Tue Sep 19, 2017 11:41 am

Looks plausible :) .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Tue Sep 19, 2017 11:50 am

ruralavalon wrote:
Tue Sep 19, 2017 11:41 am
Looks plausible :) .
How close is this to the allocation that was previously recommended - 20% bonds, 20% international stocks and 60% domestic stocks.

Any other fund to add / subtract to get it closer to that?

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ruralavalon
Posts: 11677
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New 401(k) Provider - Empower Retirement

Post by ruralavalon » Tue Sep 19, 2017 1:06 pm

remasteredx2 wrote:
Tue Sep 19, 2017 11:50 am
ruralavalon wrote:
Tue Sep 19, 2017 11:41 am
Looks plausible :) .
How close is this to the allocation that was previously recommended - 20% bonds, 20% international stocks and 60% domestic stocks.

Any other fund to add / subtract to get it closer to that?
remasteredx2 wrote:
Tue Sep 19, 2017 11:08 am
ruralavalon wrote:
Sat Sep 16, 2017 11:29 am
What is the return currently being paid on the Key Guaranteed Portfolio in your 401k? Doesn't say. It goes to this webpage https://awrd.morningstar.com/SBT/Tools/ ... =NO_TICKER

Viewing: Rate of Return (as of 31-Aug-2017 ) N/A N/A N/A N/A

So I'm not sure what this is at all :|


You cannot make a contribution to your 401k from the $20k you have now, you can contribute to your 401k only by deductions from payroll at work. gotcha, I knew that but it slipped my mind.

Do you currently have anything in the 401k? If so how much? $0 currently. This is the first year they are offering.

About how much do you think you may be contributing per month to the 401k? I would like to contribute atleast $1000 per month out of my paycheck. There's 6 pay periods left in the year so I have it set to take out 733 per pay period to get the full 4% match for the year. After that, I want to contribute atleast $500 per pay period which adds up to 12k per year

How much have you contributed so far this year to your IRA? $0, Will put in 5.5k by the end of this exercise.

There are initial minimum investments required for each fund in an IRA.

In your traditional rollover IRA the share class to use depends entirely on the amounts you will start with in each fund in that account. If $2500 or more in a fund then it's Investor Class. If it's $10,000 or more in a fund then it's Premium Class. You don't have enough money to use Institutional Class. - that cleared it up, thank you!
This year you plan to contribute $4.4k ($733 x 6) to your 401k, plus the employer match of $2.4k, and also plan to contribute the maximum $5.5k to both IRAs. Is that correct?

If I understand your intended contributions correctly, then this is what the portfolio could be by year end. Total portfolio = $37.8k. The suggested asset allocation is 20% bonds, 20% international stocks, and 60% domestic stocks. The percentages given are percentages of the total portfolio, not percentages of any single account. All percentages and dollar amounts are rounded off so will not add up exactly.

Your 401K (18% of portfolio; $6.8k; adds $12k/yr + $2.4k/yr employer match = $14.4k/yr total = 57% of new annual contributions)
13%, $4.9k, iShares S&P 500 Index Fund K (WFSPX) ER 0.04%
05%, $1.9k, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%

Your traditional IRA @ Fidelity (67% of portfolio; $25.5k; adds $5.5k/yr = 22% of new annual contributions)
39%, $14.7k, Fidelity Total Market Index Fund Premium Class (FSTMX) ER 0.09%
15%, $5.7k, Fidelity Total International Index Fund Investor Class (FTIGX) ER 0.17%
13%, $4.9k, Fidelity U.S. Bond Index Fund - Investor Class (FBIDX) ER 0.14%

Spousal Traditional IRA @ Fidelity (15% of portfolio; $5.5k; adds $5.5k/yr = 22% of new annual contributions)
08%, $3.0k, Fidelity Total Market Index Fund Investor Class (FSTMX) ER 0.09%
07%, $2.5k, Fidelity U.S. Bond Index Fund Investor Class (FBIDX) ER 0.14%

My example simply adds the international index fund investor class in your traditional IRA.

At your level of contributions you will soon be in premium class shares.

To make portfolio management and rebalancing easy it's useful to have an account which has all three fund types. In your case that could be your traditional IRA. You can manage the asset allocation by simply exchanging between funds inside that account.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

remasteredx2
Posts: 10
Joined: Tue Sep 12, 2017 9:17 am

Re: New 401(k) Provider - Empower Retirement

Post by remasteredx2 » Wed Sep 20, 2017 10:51 am

ruralavalon wrote:
Tue Sep 19, 2017 1:06 pm
remasteredx2 wrote:
Tue Sep 19, 2017 11:50 am
ruralavalon wrote:
Tue Sep 19, 2017 11:41 am
Looks plausible :) .
How close is this to the allocation that was previously recommended - 20% bonds, 20% international stocks and 60% domestic stocks.

Any other fund to add / subtract to get it closer to that?
remasteredx2 wrote:
Tue Sep 19, 2017 11:08 am
ruralavalon wrote:
Sat Sep 16, 2017 11:29 am
What is the return currently being paid on the Key Guaranteed Portfolio in your 401k? Doesn't say. It goes to this webpage https://awrd.morningstar.com/SBT/Tools/ ... =NO_TICKER

Viewing: Rate of Return (as of 31-Aug-2017 ) N/A N/A N/A N/A

So I'm not sure what this is at all :|


You cannot make a contribution to your 401k from the $20k you have now, you can contribute to your 401k only by deductions from payroll at work. gotcha, I knew that but it slipped my mind.

Do you currently have anything in the 401k? If so how much? $0 currently. This is the first year they are offering.

About how much do you think you may be contributing per month to the 401k? I would like to contribute atleast $1000 per month out of my paycheck. There's 6 pay periods left in the year so I have it set to take out 733 per pay period to get the full 4% match for the year. After that, I want to contribute atleast $500 per pay period which adds up to 12k per year

How much have you contributed so far this year to your IRA? $0, Will put in 5.5k by the end of this exercise.

There are initial minimum investments required for each fund in an IRA.

In your traditional rollover IRA the share class to use depends entirely on the amounts you will start with in each fund in that account. If $2500 or more in a fund then it's Investor Class. If it's $10,000 or more in a fund then it's Premium Class. You don't have enough money to use Institutional Class. - that cleared it up, thank you!
This year you plan to contribute $4.4k ($733 x 6) to your 401k, plus the employer match of $2.4k, and also plan to contribute the maximum $5.5k to both IRAs. Is that correct?

If I understand your intended contributions correctly, then this is what the portfolio could be by year end. Total portfolio = $37.8k. The suggested asset allocation is 20% bonds, 20% international stocks, and 60% domestic stocks. The percentages given are percentages of the total portfolio, not percentages of any single account. All percentages and dollar amounts are rounded off so will not add up exactly.

Your 401K (18% of portfolio; $6.8k; adds $12k/yr + $2.4k/yr employer match = $14.4k/yr total = 57% of new annual contributions)
13%, $4.9k, iShares S&P 500 Index Fund K (WFSPX) ER 0.04%
05%, $1.9k, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) ER 0.11%

Your traditional IRA @ Fidelity (67% of portfolio; $25.5k; adds $5.5k/yr = 22% of new annual contributions)
39%, $14.7k, Fidelity Total Market Index Fund Premium Class (FSTMX) ER 0.09%
15%, $5.7k, Fidelity Total International Index Fund Investor Class (FTIGX) ER 0.17%
13%, $4.9k, Fidelity U.S. Bond Index Fund - Investor Class (FBIDX) ER 0.14%

Spousal Traditional IRA @ Fidelity (15% of portfolio; $5.5k; adds $5.5k/yr = 22% of new annual contributions)
08%, $3.0k, Fidelity Total Market Index Fund Investor Class (FSTMX) ER 0.09%
07%, $2.5k, Fidelity U.S. Bond Index Fund Investor Class (FBIDX) ER 0.14%

My example simply adds the international index fund investor class in your traditional IRA.

At your level of contributions you will soon be in premium class shares.

To make portfolio management and rebalancing easy it's useful to have an account which has all three fund types. In your case that could be your traditional IRA. You can manage the asset allocation by simply exchanging between funds inside that account.
Thank you for all your suggestions ruralavalon. I've set up all the necessary contributions % to the 401k, maxed out contribution to my IRA and selected those 3 funds allocating funds in the % suggested. All I have left to do is talk to the spousey about making her own IRA. I have the 5.5k set to contribute to that for 2017. I wish I did this earlier this year when it was still possible to contribute towards 2016. I wish I had also been investing rather than having the funds sit in that IRA account for almost 2 years. It looks like we are due for a market correct in the near future and I'm buying higher than it would have been 2 years ago but anyway, can't ever time the market accurately so better now that never i suppose. I may change hers to one fund instead of 2 just for the sake of simplicity . You mentioned Fidelity Four-in-One Index Fund (FFNOX) ER 0.11% earlier and I've been reading up on it and I think that's a good choice for her. But I gotta discuss with her first. Thank you for all the knowledge bestowed upon me so far! I hope this is just the beginning of financial literacy for both my wife and I!

:sharebeer

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