Need help with Transamerica 401K

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C35rls
Posts: 4
Joined: Fri Sep 07, 2018 6:33 pm

Need help with Transamerica 401K

Post by C35rls » Fri Sep 07, 2018 6:47 pm

Hello,

I have a Transamrica 401K plan that i have no clue whats going on. Somehow all of the funds 33Kare in T.Rowe Price retirement 2050 Ret Opt and i dont remember picking that. Anyway i rolled over my 401K from a previous employer now i need help figuring it out. Any suggestions and recommendations would be greatly appreciated.

I am 35 years old. I have no other investment accounts other than the 401K account. 401K matches 6% up to 66% of pay no waiting period. Tax bracket is 25% for Federal 8% CA State. I was thinking of investing in the stock market with maybe $1,500 - $2,000 and thought about using Robing hood, looking into Comcast CMCSA. I have no debt other than monthly car payment and have about 6 months worth of monthly expenses saved up in case of an emergency.

I was thinking of going with three options

Transamerica Stable Value Compass Option

Templeton Global Bond Ret Opt

Loomis Sayles Investment Grade Bond Ret Opt

Options are - Had no luck getting the ticker signs. Tried the chat function and i was told to google it!!

Short Bonds/Stable/MMkt Expense Ratio
Transamerica Stable Value Compass Option (Perf. Incp.: 01/20/2010) N/A
Interm./Long-Term Bond Expense Ratio
Loomis Sayles Investment Grade Bond Ret Opt 0.94
State Street U.S. Bond Index Ret Opt 0.85
Western Asset Core Plus Bond Ret Opt 1.1
JPMorgan Government Securities Ret Opt 1.09
Aggressive Bonds Expense Ratio
Templeton Global Bond Ret Opt 1.21
Large-Cap Stocks Expense Ratio
Virtus Ceredex Large-Cap Value Equity Ret Opt 1.22
Transamerica Partners Stock Index Ret Opt 0.58
Alger Capital Appreciation Ret Opt 1.38
Morgan Stanley Growth Ret Opt 1.1
Small/Mid-Cap Stocks Expense Ratio
Virtus Ceredex Mid-Cap Value Equity Ret Opt 1.27
State Street S&P Mid Cap Index Ret Opt 0.79
Goldman Sachs Mid-Cap Opportunities Ret Opt 1.3
TA Vanguard Small-Cap Value Index Ret Opt 0.94
State Street Russell Small Cap Index Ret Opt 0.84
TA Vanguard Small-Cap Growth Index Ret Opt 0.94
TA Vanguard Real Estate Index Ret Opt 0.85
International Stocks Expense Ratio
American Funds EuroPacific Growth Ret Opt 1.1
American Funds New Perspective Ret Opt 1.09
State Street International Index Ret Opt 0.95
MSCI ACWI Ex USA
Transamerica International Equity Ret Opt 1.2
Oppenheimer Developing Markets Ret Opt 1.57
Multi-Asset/Other Expense Ratio
Franklin Utilities Ret Opt 1.08
BlackRock Global Allocation Ret Opt 1.3
T. Rowe Price Retirement Balanced Ret Opt 1.16
T. Rowe Price Retirement 2005 Ret Opt 1.18
T. Rowe Price Retirement 2010 Ret Opt 1.17
T. Rowe Price Retirement 2015 Ret Opt 1.19
T. Rowe Price Retirement 2020 Ret Opt 1.23
T. Rowe Price Retirement 2025 Ret Opt 1.27
T. Rowe Price Retirement 2030 Ret Opt 1.29
T. Rowe Price Retirement 2035 Ret Opt 1.32
T. Rowe Price Retirement 2040 Ret Opt 1.34
T. Rowe Price Retirement 2045 Ret Opt 1.34
T. Rowe Price Retirement 2050 Ret Opt 1.34
T. Rowe Price Retirement 2055 Ret Opt 1.34
T. Rowe Price Retirement 2060 Ret Opt (Perf. Incp.: 06/22/2014) 1.34
Manning & Napier Pro-Mix Conservative Term Ret Opt 1.25
Manning & Napier Pro-Mix Moderate Term Ret Opt 1.3
Manning & Napier Pro-Mix Extended Term Ret Opt 1.3
Manning & Napier Pro-Mix Maximum Term Ret Opt 1.3

Morningstar Aggressive Target Risk


Thank you for all the help.
Last edited by C35rls on Wed Sep 12, 2018 3:34 pm, edited 4 times in total.

runner3081
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Joined: Mon Aug 22, 2016 3:22 pm

Re: Need help with Transamerica 401K

Post by runner3081 » Fri Sep 07, 2018 8:08 pm

C35rls wrote:
Fri Sep 07, 2018 6:47 pm
Hello,

I have a Transamrica 401K plan that i have no clue whats going on. Somehow all of the funds 33Kare in T.Rowe Price retirement 2050 Ret Opt and i dont remember picking that.
Typically, when you don't make an election of where your funds go, they end up in a target date fund.

gostars
Posts: 439
Joined: Mon Oct 09, 2017 7:53 pm

Re: Need help with Transamerica 401K

Post by gostars » Fri Sep 07, 2018 8:24 pm

Please provide the expense ratios for each of the funds, as well as any fees the plan charges.

As a general rule, your best options will probably be the ones with "Index" in the name. SSgA U.S. Bond Index is a likely choice, as it tracks the Bloomberg Barclays US Aggregate Bond Index (similar to Vanguard Total Bond Market). Transamerica Partners Stock Index looks like an S&P 500 fund. SSgA Russell Small Cap Index looks like a Russell 2000 fund. SSgA International Index looks like an all-country large/mid-cap fund. The stable-value fund might be an option if it's got a good return (it probably doesn't).

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ruralavalon
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Re: Need help with Transamerica 401K

Post by ruralavalon » Sat Sep 08, 2018 8:40 am

Welcome to the forum :) .

Please give the ticker and expense ratio for each fund offered. You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all of your information is in one place.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

C35rls
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Joined: Fri Sep 07, 2018 6:33 pm

Re: Need help with Transamerica 401K

Post by C35rls » Mon Sep 10, 2018 3:38 pm

Thank you

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ruralavalon
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Location: Illinois

Re: Need help with Transamerica 401K

Post by ruralavalon » Mon Sep 10, 2018 6:02 pm

It's very important to have low expense ratios. The target date funds offered in your 401k have high expense ratios (1.34%), you can do better using a few separate index funds. Low expense ratios are critical to long-term investing performance. Seemingly small annual fees have a large cumulative impact over time. Here is a calculator you could use to estimate the impact of investing expenses. Bankrate.com, "Mutual fund fees calculator".

Also, low expense ratios are the best predictor of future performance. Morningstar, 8/9/10 . “If there's anything in the whole world of mutual funds that you can take to the bank, it's that expense ratios help you make a better decision. In every single time period and data point tested, low-cost funds beat high-cost funds.” “Investors should make expense ratios a primary test in fund selection. They are still the most dependable predictor of performance.”

"The expense ratio is the most proven predictor of future fund returns." "There are many other things to consider, but investors should make expense ratios their first or second screen." Morningstar, 5/5/18.

. . . . .

The funds offered in your 401k are not mutual funds, they are Separate Accounts and will not have ticker symbols. In your 401k materials or on your 401k website there will be a short fact sheet for each fund which states:
1) the name of the firm managing the fund;
2) the investment strategy, including the index used;
3) the expenses charged the plan participant; and
4) the fund performance compared to the index.

In my opinion the better funds to consider using in your 401k include:
1) Transamerica Partners Stock Index Retirement Option (S&P 500 index, 81% of U.S. stock market), ER 0.58%;
2) State Street International Index Retirement Option (MSCI ACWI EX U.S., larger companies in both developed and emerging markets), ER 0.95%; and
3) State Street U.S. Bond Index Retirement Option (Bloomberg Barclays U.S. Aggregate Bond Index), ER 0.85%.

. . . . .

It's often better to look at all accounts together as a single unified portfolio, coordinating investments among all accounts, rather than treat each account separately. For example if you have an IRA that might be a good place to buy a lower expense international stock fund or a lower expense bond fund, or both.

Do you have any other accounts in addition to your 401k? If so what sort of accounts, what fund firm is each with, and what investments do you currently have in each account? How much is in each account? What are you contributing annually to each account?

Is there an employer match offered in your 401k? If so what is the employer match, and how much do you have to contribute annually to get the full employer match each year?

What is your age? What is your tax bracket, both federal and state? What is your tax filing status?

Do you have an asset allocation (stock/bond mix, and domestic/international stock mix) that you want to aim for?

Please simply add this to your original post using the edit button, so that all of your information is in one place. Please see this for format: "Asking Portfolio Questions".
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

C35rls
Posts: 4
Joined: Fri Sep 07, 2018 6:33 pm

Re: Need help with Transamerica 401K

Post by C35rls » Wed Sep 12, 2018 3:12 pm

I'd like to thank you for taking the time to give some insight how this stuff works. I really appreciate it.

gostars
Posts: 439
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Re: Need help with Transamerica 401K

Post by gostars » Wed Sep 12, 2018 10:11 pm

Transamerica Partners Stock Index Ret Opt is probably the only fund I would use in that plan. Probably best to hold your bond and international allocations in taxable or an IRA. Also see How to campaign for a better 401(k) plan in the wiki, because that's not a good 401k plan, though still worth using at least up to the max of the employer match.

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ruralavalon
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Location: Illinois

Re: Need help with Transamerica 401K

Post by ruralavalon » Thu Sep 13, 2018 7:39 am

C35rls wrote:
Fri Sep 07, 2018 6:47 pm
I have a Transamrica 401K plan that i have no clue whats going on. Somehow all of the funds 33Kare in T.Rowe Price retirement 2050 Ret Opt and i dont remember picking that. Anyway i rolled over my 401K from a previous employer now i need help figuring it out. Any suggestions and recommendations would be greatly appreciated.

I am 35 years old. I have no other investment accounts other than the 401K account. 401K matches 6% up to 66% of pay no waiting period. Tax bracket is 25% for Federal 8% CA State. I was thinking of investing in the stock market with maybe $1,500 - $2,000 and thought about using Robing hood, looking into Comcast CMCSA. I have no debt other than monthly car payment and have about 6 months worth of monthly expenses saved up in case of an emergency.
Are you contributing enough to your 401k to get the full employer match? That should be your first priority. If you are able to invest more than the amount needed to get the full employer match, then the next investing priority should be an IRA.

How much do you need to contribute annually to your 401k in order to get the full employer match? About how much do you believe you might be able to contribute too investing annually, in addition to contributing enough to your 401k to get the full employer match?

I don't think its a good idea to invest in individual stocks in a Robinhood account. That is not very diversified. Instead use very broadly diversified mutual funds, and use an IRA for the tax advantages. In your tax bracket it is probably better to use a traditional IRA, which gives you a tax deduction.

Here is a general account funding priority that usually works well for many people (when there is no high interest debt or HSA use):
1) Contribute to the work-based plans (401k, 403b, 457, TSP, etc.) enough to get the full employer match (the match is like free money, your best possible investment);
2) Contribute the maximum to an IRA, traditional or Roth (or backdoor Roth technique), depending on eligibility and personal circumstances;
3) Contribute the remainder of the maximum employee contribution to the work-based accounts; and
4) Contribute to a taxable investing account.

Please see the wiki article "Prioritizing investments".

In addition to contributing enough to your 401k to get the full employer match, I suggest opening a traditional IRA at a low cost provider like Vanguard, Fidelity or Schwab. You can contribute up to $5.5k per year, and use the IRA to buy a lower expense international stock fund or a lower expense bond fund, or both.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

C35rls
Posts: 4
Joined: Fri Sep 07, 2018 6:33 pm

Re: Need help with Transamerica 401K

Post by C35rls » Thu Sep 13, 2018 9:17 am

Thank you for all your help

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