New 401k suggestions

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Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

New 401k suggestions

Post by johnhenryiii » Sat Jul 08, 2017 9:18 am

Emergency funds $12,000
Debt 1 year left on mortgage we have been doubling and tripling payments since purchase, car $500 @4%
Married kids
Income 70-80,000 wife 30,000
Age 35
Roth ira at EJ $5000 havent been contributing from initial investment
taxable stock account at EJ $30,000

Need opinions on 401k no company match

My initial thoughts while reading were
S&P 500 EQUITY INDEX FUND
Large Cap Stock - Blend
20%
S&P 400 MIDCAP INDEX FUND
Mid Cap Stock - Blend
20%
RUSSELL 2000 INDEX FUND
Small Cap Stock - Blend
20%
INTERNATIONAL INDEX FUND
International Stock - Blend
20%
U.S. REIT INDEX FUND
Specialty - Special Equity
20%

Will probably shift the REIT into bonds in near future



Prior Prior Expense
Month Quarter 1yr 5yr 10 yr Ratio

Fixed Income - Short Term
GOVERNMENT SHORT-TERM INVESTMENT FUND 0029, 0035, 1254
Fund Summary 0.07% 0.18% 0.46% 0.15% {0.13%} 0.05%
Fixed Income - Intermediate Bond
BOND MARKET INDEX FUND 0029, 0035, 1254
Fund Summary -0.12% 1.43% -0.45% 2.12% {3.92%} 0.03%
Balanced - Custom
BALANCED FUND 0029, 0035
Fund Summary 0.25% 2.26% 8.43% 8.30% {9.52%} 0.05%
Large Cap Stock - Blend
S&P 500 EQUITY INDEX FUND 0029, 0035
Fund Summary 0.62% 3.08% 17.87% 14.60% {14.50%} 0.01%
Mid Cap Stock - Blend
S&P 400 MIDCAP INDEX FUND 0029, 0035, 0042
Fund Summary 1.61% 1.96% 18.55% 14.88% {16.45%} 0.02%
Small Cap Stock - Blend
RUSSELL 2000 INDEX FUND 0029, 0035, 0042
Fund Summary 3.45% 2.46% 24.56% 13.66% {14.61%} 0.03%
International Stock - Blend
INTERNATIONAL INDEX FUND 0029, 0035, 0141
Fund Summary -0.07% 6.37% 19.82% 8.82% {8.16%} 0.04%
Other - Lifecycle
BRIGHT HORIZON 2015 FUND 0029, 0035
Fund Summary 0.26% 2.22% 7.38% 6.94% {8.57%} 0.09%
BRIGHT HORIZON 2020 FUND 0029, 0035
Fund Summary 0.35% 2.48% 9.29% 7.81% {9.68%} 0.09%
BRIGHT HORIZON 2025 FUND 0029, 0035
Fund Summary 0.44% 2.71% 10.84% 8.62% {10.00%} 0.09%
BRIGHT HORIZON 2030 FUND 0029, 0035
Fund Summary 0.55% 2.99% 12.87% 9.43% {11.08%} 0.09%
BRIGHT HORIZON 2035 FUND 0029, 0035
Fund Summary 0.63% 3.19% 14.37% 10.10% {11.13%} 0.09%
BRIGHT HORIZON 2040 FUND 0029, 0035
Fund Summary 0.66% 3.32% 15.08% 10.46% {11.87%} 0.09%
BRIGHT HORIZON 2045 FUND 0029, 0035
Fund Summary 0.68% 3.37% 15.61% 10.65% {11.52%} 0.09%
BRIGHT HORIZON 2050 FUND 0029, 0035
Fund Summary 0.70% 3.40% 15.83% 10.70% {12.03%} 0.09%
BRIGHT HORIZON 2055 FUND
Fund Summary 0.70% 3.40% 15.79% N/A {9.47%} 0.09%
BRIGHT HORIZON 2060 FUND BHILX
Fund Summary 0.70% N/A N/A N/A {1.94%} 0.09%
BRIGHT HORIZON RETIREMENT INCOME FUND 0029, 0035
Fund Summary 0.17% 1.95% 5.54% 5.06% {6.74%} 0.09%
Specialty - Special Equity
U.S. REIT INDEX FUND 0029, 0035
Fund Summary 2.39% 1.57% -2.52% 8.77% {14.95%} 0.07%
Stable Value - Short Term
STABLE VALUE FUND
Fund Summary 0.14% 0.41% 1.66% 1.63% {2.01%} 0.04%

User avatar
Nate79
Posts: 4386
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Location: Delaware

Re: New 401k suggestions

Post by Nate79 » Sat Jul 08, 2017 9:27 am

Dump Edward Jones immediatly. That's the best financial decision you can make.

User avatar
Duckie
Posts: 6561
Joined: Thu Mar 08, 2007 2:55 pm

Re: New 401k suggestions

Post by Duckie » Sat Jul 08, 2017 4:51 pm

johnhenryiii, welcome to the forum.
johnhenryiii wrote:Roth ira at EJ $5000 havent been contributing from initial investment
taxable stock account at EJ $30,000
Get away from Edward Jones. Move to Vanguard, Fidelity, or Schwab.
Need opinions on 401k no company match
You have excellent low-cost index funds. Even the Bright Horizon target-date funds are good.
My initial thoughts while reading were
S&P 500 EQUITY INDEX FUND
Large Cap Stock - Blend
20%
S&P 400 MIDCAP INDEX FUND
Mid Cap Stock - Blend
20%
RUSSELL 2000 INDEX FUND
Small Cap Stock - Blend
20%
Large caps are about 80% of US stocks, mid-caps about 6% and small caps about 14%. You are seriously overweighting mid/small caps.
INTERNATIONAL INDEX FUND
International Stock - Blend
20%
If this is the same fund in the Bright Horizon funds it is a great international fund..
U.S. REIT INDEX FUND
Specialty - Special Equity
20%

Will probably shift the REIT into bonds in near future
Switch now. You're in your mid-30s. Being aggressive has a down-side. I'd either add the Bond Market Index Fund to at least 20% of your portfolio or go with 100% Bright Horizon 2035 Fund which currently has about 20% bonds. Of course these should all be coordinated with your Roth IRA and taxable accounts (if the taxable is earmarked for retirement). You look at all accounts with the same goal and time-frame as one big portfolio.

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Sun Jul 09, 2017 7:59 am

Thank you. I think I'll stick to the Bright Horizon 2040. Not much difference in ER by the time you add up individually vs the target date fund. What would you do with the EJ money?

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Duckie
Posts: 6561
Joined: Thu Mar 08, 2007 2:55 pm

Re: New 401k suggestions

Post by Duckie » Sun Jul 09, 2017 4:55 pm

johnhenryiii wrote:What would you do with the EJ money?
I'd get it out of EJ. After that it depends.
  • Is the taxable account for retirement or something else?
  • You currently have $30K in taxable and $5K in a Roth IRA (his or hers?).
  • How much is in the 401k and whose is it?
  • Have you figured the cost basis in the taxable account so you'd know how much the gain or loss is if you sold it today? Do you have all the paperwork (either online or on paper) for the accounts? Meaning, can you prove your taxable cost basis if the IRS comes knocking? You need to have all that information before you transfer out of EJ.
  • Do you have a desired Asset allocation? The Bright Horizon 2040 Fund has a current AA of 82% stocks, 18% bonds, with 33% of stocks in international. That breaks down to 55% US stocks, 27% international stocks, and 18% bonds. Is that close to what you want? At age 35 I recommend you increase your bond AA.

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Sun Jul 09, 2017 5:53 pm

Taxable account I had opened an online account and was buying and selling stocks here and there. Turned a good profit over the years but thought ej could do better then transferred to them.

$30k his,$5k his, $5k hers

401k just started weekly contribution 10%

According to my online account for taxable the stocks in the account under unrealized taxable gain/loss -$1,400 and 1 mutual fund at -$600. Yes both are negative numbers

Yes i was thinking close to 20% went with the lower to try to capitalize on stock market currently

Also looking at some property that I think is a good investment or to build on. $100k @5.65% or 3.5% with 20k down over 10 years. Would I be better using a down payment from the $30k taxable to avoid higher interest rate or sticking that money into market?

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Duckie
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Joined: Thu Mar 08, 2007 2:55 pm

Re: New 401k suggestions

Post by Duckie » Sun Jul 09, 2017 7:24 pm

johnhenryiii wrote:Taxable account I had opened an online account and was buying and selling stocks here and there. Turned a good profit over the years but thought ej could do better then transferred to them.
<snip>
Would I be better using a down payment from the $30k taxable to avoid higher interest rate or sticking that money into market?
This sounds like the $30K in taxable is NOT for retirement.
$5k his, $5k hers

401k just started weekly contribution 10%
Okay, you've just started a 401k and each of you has $5K in Roth IRAs. Since the taxable account is not part of the retirement portfolio you can easily use the Bright Horizon 2040 Fund in the 401k and target-date funds with close to an 80/20 AA in both Roth IRAs. You could transfer your Roth IRAs to either Vanguard or Fidelity because both custodians have excellent low-cost target-date funds. Vanguard has (VTTHX) Vanguard Target Retirement 2035 Fund (0.15%) with a current AA of 79/21 and Fidelity has (FXIFX) Fidelity Freedom Index 2030 Fund Investor Class (0.15%) with an AA of 78/22.
According to my online account for taxable the stocks in the account under unrealized taxable gain/loss -$1,400 and 1 mutual fund at -$600. Yes both are negative numbers
That means you can sell without taxable gains.

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Sun Jul 09, 2017 8:55 pm

Well the taxable $30k is going for retirement or the down payment. Not sure which it would benefit me more. Interest rate wise? If I put down 20% I can get a lower interest rate but would putting that money in some type of fund benefit me more?

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Sat Aug 19, 2017 11:25 am

Duckie wrote:
Sun Jul 09, 2017 7:24 pm
johnhenryiii wrote:Taxable account I had opened an online account and was buying and selling stocks here and there. Turned a good profit over the years but thought ej could do better then transferred to them.
<snip>
Would I be better using a down payment from the $30k taxable to avoid higher interest rate or sticking that money into market?
This sounds like the $30K in taxable is NOT for retirement.
$5k his, $5k hers

401k just started weekly contribution 10%
Okay, you've just started a 401k and each of you has $5K in Roth IRAs. Since the taxable account is not part of the retirement portfolio you can easily use the Bright Horizon 2040 Fund in the 401k and target-date funds with close to an 80/20 AA in both Roth IRAs. You could transfer your Roth IRAs to either Vanguard or Fidelity because both custodians have excellent low-cost target-date funds. Vanguard has (VTTHX) Vanguard Target Retirement 2035 Fund (0.15%) with a current AA of 79/21 and Fidelity has (FXIFX) Fidelity Freedom Index 2030 Fund Investor Class (0.15%) with an AA of 78/22.
According to my online account for taxable the stocks in the account under unrealized taxable gain/loss -$1,400 and 1 mutual fund at -$600. Yes both are negative numbers
That means you can sell without taxable gains.

Just got everything transferred. Should I sell then buy what I'm wanting or exchange?

pianoboy
Posts: 32
Joined: Thu Jan 19, 2017 8:49 pm

Re: New 401k suggestions

Post by pianoboy » Sat Feb 16, 2019 7:54 pm

How comes the bright horizon is better it only averaged 8% the last 5 years and the sp 500 did 12%? Would something like 50% bright horizon and 50% sp 500 be better? Or why have the target fund at all due to the expense.

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telemark
Posts: 2435
Joined: Sat Aug 11, 2012 6:35 am

Re: New 401k suggestions

Post by telemark » Sat Feb 16, 2019 8:58 pm

At those prices, there is no reason not to go with the target date fund, unless you have your own strong opinions about asset allocation.

pianoboy
Posts: 32
Joined: Thu Jan 19, 2017 8:49 pm

Re: New 401k suggestions

Post by pianoboy » Sat Feb 16, 2019 9:38 pm

Thanks, just wondering because i have the same plan , so i may pick the bright horizon

pianoboy
Posts: 32
Joined: Thu Jan 19, 2017 8:49 pm

Re: New 401k suggestions

Post by pianoboy » Sun Feb 17, 2019 7:14 am

I only considered putting more into sp500 because of the track record being 12% as opposed to BH at 8%

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ruralavalon
Posts: 15445
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Location: Illinois

Re: New 401k suggestions

Post by ruralavalon » Sun Feb 17, 2019 11:57 am

You have some great fund options offered in your 401k, you are fortunate :) .

For your 401k my suggestion is:
1) 30%, BOND MARKET INDEX FUND, ER 0.03%;
2) 50%, S&P 500 EQUITY INDEX FUND, ER 0.01%; and
3) 20%, INTERNATIONAL INDEX FUND, ER 0.04%.

What index is used by the international index fund?

OR a Bright Horizon target date fund fund would be reasonable instead.

I suggest transferring the Roth IRA away from Edward Jones, to a low cost provider like Vanguard or Fidelity. Do a rollover of the IRA with a trustee to trustee transfer.

If you use a Bright Horizon target date fund in your 401k, then just use a similar target date fund in your IRAs.

If you rollover the IRA to Fidelity, and want to simply use target date funds, then be sure to use a low expense Fidelity Freedom Index Fund, rather than a much more expensive Fidelity Freedom Fund.


johnhenryiii wrote:Also looking at some property that I think is a good investment or to build on. $100k @5.65% or 3.5% with 20k down over 10 years. Would I be better using a down payment from the $30k taxable to avoid higher interest rate or sticking that money into market?
jonhhenryiii wrote:Well the taxable $30k is going for retirement or the down payment. Not sure which it would benefit me more. Interest rate wise? If I put down 20% I can get a lower interest rate but would putting that money in some type of fund benefit me more?
I suggest selling the $30k of stocks in the taxable brokerage account, and using that for a down payment on your home purchase. A 20% down payment gets you a much better interest rate and also avoids having to buy very expensive Private Mortgage Insurance (PMI).


At age 35 and fairly new to investing, a high contribution rate is more important than almost anything else in your investing plan.
johnhenryiii wrote:$30k his,$5k his, $5k hers

401k just started weekly contribution 10%
The maximum annual contribution to an IRA is now $6k.

How much (in dollars) are you contributing annually to your 401k?

Is there an employer match offered in your 401k? if so what is it?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Sun Feb 17, 2019 3:30 pm

ruralavalon wrote:
Sun Feb 17, 2019 11:57 am
You have some great fund options offered in your 401k, you are fortunate :) .

For your 401k my suggestion is:
1) 30%, BOND MARKET INDEX FUND, ER 0.03%;
2) 50%, S&P 500 EQUITY INDEX FUND, ER 0.01%; and
3) 20%, INTERNATIONAL INDEX FUND, ER 0.04%.

What index is used by the international index fund?

OR a Bright Horizon target date fund fund would be reasonable instead.

I suggest transferring the Roth IRA away from Edward Jones, to a low cost provider like Vanguard or Fidelity. Do a rollover of the IRA with a trustee to trustee transfer.

If you use a Bright Horizon target date fund in your 401k, then just use a similar target date fund in your IRAs.

If you rollover the IRA to Fidelity, and want to simply use target date funds, then be sure to use a low expense Fidelity Freedom Index Fund, rather than a much more expensive Fidelity Freedom Fund.


johnhenryiii wrote:Also looking at some property that I think is a good investment or to build on. $100k @5.65% or 3.5% with 20k down over 10 years. Would I be better using a down payment from the $30k taxable to avoid higher interest rate or sticking that money into market?
jonhhenryiii wrote:Well the taxable $30k is going for retirement or the down payment. Not sure which it would benefit me more. Interest rate wise? If I put down 20% I can get a lower interest rate but would putting that money in some type of fund benefit me more?
I suggest selling the $30k of stocks in the taxable brokerage account, and using that for a down payment on your home purchase. A 20% down payment gets you a much better interest rate and also avoids having to buy very expensive Private Mortgage Insurance (PMI).


At age 35 and fairly new to investing, a high contribution rate is more important than almost anything else in your investing plan.
johnhenryiii wrote:$30k his,$5k his, $5k hers

401k just started weekly contribution 10%
The maximum annual contribution to an IRA is now $6k.

How much (in dollars) are you contributing annually to your 401k?

Is there an employer match offered in your 401k? if so what is it?
Old post now im 37 lol got away from EJ. Went with VG. Have been maxing out 401k, no match though. Bright horizon 2040 0.07 ER. Maxing IRA as well
Current
my roth 401k 31,000 Target 2040
wife roth 401k 1,500 Target 2040
my roth ira 22,000 Target 2040
wife roth ira 22,000 Target 2040
Decided against property and just paid off house last year

pianoboy
Posts: 32
Joined: Thu Jan 19, 2017 8:49 pm

Re: New 401k suggestions

Post by pianoboy » Sun Feb 17, 2019 8:46 pm

Will you get a pension?

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Sun Feb 17, 2019 11:26 pm

pianoboy wrote:
Sun Feb 17, 2019 8:46 pm
Will you get a pension?
As of now yes. Union pension right now its around 3500-4000 a month with 30 years. I got little over 20 years to go and usually goes up every contract but not depending on it but trying to calculate it in

pianoboy
Posts: 32
Joined: Thu Jan 19, 2017 8:49 pm

Re: New 401k suggestions

Post by pianoboy » Mon Feb 18, 2019 8:21 am

Were in very similar situation then. You must be a teamster
my goal is 57 (will get 2800 a month)

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Mon Feb 18, 2019 3:43 pm

pianoboy wrote:
Mon Feb 18, 2019 8:21 am
Were in very similar situation then. You must be a teamster
my goal is 57 (will get 2800 a month)
Yes
Including my part time years I'll have 30 years at age 58. Went full time late in the game.

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Tue May 14, 2019 7:59 pm

ruralavalon wrote:
Sun Feb 17, 2019 11:57 am
You have some great fund options offered in your 401k, you are fortunate :) .

For your 401k my suggestion is:
1) 30%, BOND MARKET INDEX FUND, ER 0.03%;
2) 50%, S&P 500 EQUITY INDEX FUND, ER 0.01%; and
3) 20%, INTERNATIONAL INDEX FUND, ER 0.04%.

What index is used by the international index fund?MSCI EAFE
Index


OR a Bright Horizon target date fund fund would be reasonable instead.

I suggest transferring the Roth IRA away from Edward Jones, to a low cost provider like Vanguard or Fidelity. Do a rollover of the IRA with a trustee to trustee transfer.

If you use a Bright Horizon target date fund in your 401k, then just use a similar target date fund in your IRAs.

If you rollover the IRA to Fidelity, and want to simply use target date funds, then be sure to use a low expense Fidelity Freedom Index Fund, rather than a much more expensive Fidelity Freedom Fund.


johnhenryiii wrote:Also looking at some property that I think is a good investment or to build on. $100k @5.65% or 3.5% with 20k down over 10 years. Would I be better using a down payment from the $30k taxable to avoid higher interest rate or sticking that money into market?
jonhhenryiii wrote:Well the taxable $30k is going for retirement or the down payment. Not sure which it would benefit me more. Interest rate wise? If I put down 20% I can get a lower interest rate but would putting that money in some type of fund benefit me more?
I suggest selling the $30k of stocks in the taxable brokerage account, and using that for a down payment on your home purchase. A 20% down payment gets you a much better interest rate and also avoids having to buy very expensive Private Mortgage Insurance (PMI).


At age 35 and fairly new to investing, a high contribution rate is more important than almost anything else in your investing plan.
johnhenryiii wrote:$30k his,$5k his, $5k hers

401k just started weekly contribution 10%
The maximum annual contribution to an IRA is now $6k.

How much (in dollars) are you contributing annually to your 401k?

Is there an employer match offered in your 401k? if so what is it?
How much would I save in fees if I switch to individual funds in 401k and IRA?
Current fees 401k TDF 2040 0.07% IRA VFORX 0.14%
Current options 401k
Stable Value
STABLE VALUE FUND 0273
Fund Summary 0.20% 0.58% 2.25% 1.79% {1.97%} 0.04%
Fixed Income - Short Government Bond
GOVERNMENT SHORT-TERM INVESTMENT FUND 01K5, 0273
Fund Summary 0.20% 0.58% 2.12% 0.75% 0.41% 0.05%
Fixed Income - Intermediate Term Bond
BOND MARKET INDEX FUND 01K5, 0273
Fund Summary 0.02% 2.93% 5.29% 2.52% 3.61% 0.02%
Allocation - Target-Date Retirement Income
BRIGHT HORIZON RETIREMENT INCOME FUND 0273, 0284
Fund Summary 1.13% 6.05% 5.77% 4.37% 6.58% 0.07%
Allocation - Target-Date 2015
BRIGHT HORIZON 2015 FUND 0273, 0284
Fund Summary 1.37% 6.67% 5.88% 4.96% 8.33% 0.07%
Allocation - Target-Date 2020
BRIGHT HORIZON 2020 FUND 0273, 0284
Fund Summary 1.74% 7.78% 6.02% 5.49% 9.09% 0.07%
Allocation - Target-Date 2025
BRIGHT HORIZON 2025 FUND 0273, 0284
Fund Summary 2.06% 8.66% 6.05% 5.96% 9.81% 0.07%
Allocation - Target-Date 2030
BRIGHT HORIZON 2030 FUND 0273, 0284
Fund Summary 2.36% 9.45% 6.07% 6.55% 10.48% 0.07%
Allocation - Target-Date 2035
BRIGHT HORIZON 2035 FUND 0273, 0284
Fund Summary 2.61% 10.19% 6.04% 6.96% 11.00% 0.07%
Allocation - Target-Date 2040
BRIGHT HORIZON 2040 FUND 0273, 0284
Fund Summary 2.83% 10.86% 6.10% 7.22% 11.31% 0.07%
Allocation - Target-Date 2045
BRIGHT HORIZON 2045 FUND 0273, 0284
Fund Summary 2.90% 11.04% 6.10% 7.33% 11.41% 0.07%
Allocation - Target-Date 2050
BRIGHT HORIZON 2050 FUND 0273, 0284
Fund Summary 2.92% 11.12% 6.18% 7.44% 11.49% 0.07%
Allocation - Target-Date 2055
BRIGHT HORIZON 2055 FUND 0273, 0283
Fund Summary 2.92% 11.15% 6.22% 7.46% {8.97%} 0.07%
Allocation - Target-Date 2060+
BRIGHT HORIZON 2060 FUND 0273, 0283
Fund Summary 2.92% 11.19% 6.28% N/A {8.74%} 0.07%
Allocation - Balanced
BALANCED FUND 01KE, 0273
Fund Summary 2.07% 8.25% 9.66% 7.16% 9.52% 0.04%
Large Cap - Blend
S&P 500 EQUITY INDEX FUND 0273
Fund Summary 4.05% 13.66% 13.51% 11.61% 15.32% 0.02%
Mid Cap - Blend
S&P 400 MIDCAP INDEX FUND 01KH, 0273
Fund Summary 4.03% 14.50% 7.07% 9.49% 15.12% 0.01%
Small Cap - Blend
RUSSELL 2000 INDEX FUND 01KH, 0273
Fund Summary 3.42% 14.63% 4.82% 8.65% 14.14% 0.02%
International - Large Blend
INTERNATIONAL INDEX FUND 01KB, 0273
Fund Summary 2.95% 10.32% -2.41% 2.87% 8.30% 0.03%
Alternative - Diversified Real Estate
U.S. REIT INDEX FUND 01K2, 0273
Fund Summary -0.19% 15.70% 17.73% 7.89% 14.94% 0.05%

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ruralavalon
Posts: 15445
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New 401k suggestions

Post by ruralavalon » Tue May 14, 2019 8:20 pm

How much would I save in fees if I switch to individual funds in 401k and IRA?
How much (in dollars) are you contributing annually to your 401k?

Is there an employer match offered in your 401k? if so what is it?

Your contribution rate is much more important that the difference in expense ratios.

In the 401k the individual funds which I suggested are:
50%, S&P 500 EQUITY INDEX FUND, ER 0.01%, 50 x .01 = 0.50
20%, INTERNATIONAL INDEX FUND (MSCI EAFE index= developed markets only) ER 0.04%, 20 x .04 = 0.80
30%, BOND MARKET INDEX FUND, ER 0.03%, 30 x .03 = 0.90%

Total = 0.23, divided by 100 = 0.023%

The Bright Horizon fund charges 0.07%, so you save 0.047% annually.

You can do the same type of calculation for the IRA.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Topic Author
johnhenryiii
Posts: 21
Joined: Sat Jul 08, 2017 8:28 am

Re: New 401k suggestions

Post by johnhenryiii » Tue May 14, 2019 8:38 pm

ruralavalon wrote:
Tue May 14, 2019 8:20 pm
How much would I save in fees if I switch to individual funds in 401k and IRA?
How much (in dollars) are you contributing annually to your 401k?

Is there an employer match offered in your 401k? if so what is it?

Your contribution rate is much more important that the difference in expense ratios.

In the 401k the individual funds which I suggested are:
50%, S&P 500 EQUITY INDEX FUND, ER 0.01%, 50 x .01 = 0.50
20%, INTERNATIONAL INDEX FUND (MSCI EAFE index= developed markets only) ER 0.04%, 20 x .04 = 0.80
30%, BOND MARKET INDEX FUND, ER 0.03%, 30 x .03 = 0.90%

Total = 0.23, divided by 100 = 0.023%

The Bright Horizon fund charges 0.07%, so you save 0.047% annually.

You can do the same type of calculation for the IRA.
Maxing Roth 401k $19,000 and maxing his and her Roth IRA $6000
No match
Current Bond fee 0.02
Current S&P 500 0.02
Current International 0.03
Some of my funds changed updated in last post
Expecting pension

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ruralavalon
Posts: 15445
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New 401k suggestions

Post by ruralavalon » Wed May 15, 2019 7:50 am

johnhenryiii wrote:
Tue May 14, 2019 8:38 pm
ruralavalon wrote:
Tue May 14, 2019 8:20 pm
How much would I save in fees if I switch to individual funds in 401k and IRA?
How much (in dollars) are you contributing annually to your 401k?

Is there an employer match offered in your 401k? if so what is it?

Your contribution rate is much more important that the difference in expense ratios.

In the 401k the individual funds which I suggested are:
50%, S&P 500 EQUITY INDEX FUND, ER 0.01%, 50 x .01 = 0.50
20%, INTERNATIONAL INDEX FUND (MSCI EAFE index= developed markets only) ER 0.04%, 20 x .04 = 0.80
30%, BOND MARKET INDEX FUND, ER 0.03%, 30 x .03 = 0.90%

Total = 0.23, divided by 100 = 0.023%

The Bright Horizon fund charges 0.07%, so you save 0.047% annually.

You can do the same type of calculation for the IRA.
Maxing Roth 401k $19,000 and maxing his and her Roth IRA $6000
No match
Current Bond fee 0.02
Current S&P 500 0.02
Current International 0.03
Some of my funds changed updated in last post
Expecting pension
That's a very good contribution rate, 23-25% of income. With those very low expense funds you will do well.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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