New Job, New 401K. On the right track?

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Topic Author
haymac
Posts: 23
Joined: Thu Nov 29, 2018 4:28 pm

New Job, New 401K. On the right track?

Post by haymac » Mon Oct 07, 2019 7:44 pm

Salary: 120k
Emergency funds: eight months of expenses
Debt: Mortgage $1900/mo
Tax Filing Status: Single
Tax Rate: 24% Federal, 0% State
State of Residence: TN
Age: 33
Asset allocation: 80% stocks
International allocation: 30% of stocks
Bond allocation: 20%

Current retirement assets: ~$165k

Taxable
35% VTSAX Vanguard Total Stock Market Index
8% VTIAX Vanguard Total International

Roth IRA
19% VTIAX Vanguard Total International

Current 401k (~$60K)- no match
20% FXNAX Bond index fund 0.03%
18% FXAIX P Fidelity 500 index fund  0.01%

Contributions in 2020
$19,000 to new 401k with match
$6,000 backdoor roth
~$5,000 taxable

New 401K (2020)- 3% employer match
Available funds in 401K: Sorry I do not have Tickers available
Schwab US Lrge cap ETF 0.03%
Schwab US Lrge cap growth ETF 0.04%
Schwab US large cap value ETF 0.04%
Schwab mid cap ETF 0.05%
Vanguard mid cap growth ETF0.07%
Vanguard mid cap value ETF 0.07%
Schwab US small cap ETF 0.05%
Vanguard small cap growth ETF0.07%
Vanguard small cap value 0.07%
Schwab emerging market 0.13%
Schwab international equity ETF 0.06%
Shwab us reit ETF 0.07%
Schwab US TIPS ETF 0.05%
Schwab intermediate term US Trs ETF 0.06%
Schwab US aggregate bond ETF 0.04%
Vanguard short term gvt bond ETF 0.07%


Questions:
1. I will be changing jobs next month. A 401k is available immediately with 401k employer match after the first year. Although I like Vanguard for simplicity I was thinking of choosing Schwab US large/mid cap for the low expenses to make up for the FXAIX I currently have in my 401K and Schwab US aggregate for the bond portion. Do you agree?
2. Should I transfer my current 401k for ease or keep the money where it currently is to take advantage of the FXAIX and FXNAX low expenses?

ExitStageLeft
Posts: 1515
Joined: Sat Jan 20, 2018 4:02 pm

Re: New Job, New 401K. On the right track?

Post by ExitStageLeft » Mon Oct 07, 2019 7:57 pm

haymac wrote:
Mon Oct 07, 2019 7:44 pm
Salary: 120k
Emergency funds: eight months of expenses
Debt: Mortgage $1900/mo
Tax Filing Status: Single
Tax Rate: 24% Federal, 0% State
State of Residence: TN
Age: 33
Asset allocation: 80% stocks
International allocation: 30% of stocks
Bond allocation: 20%

Current retirement assets: ~$165k

Taxable
35% VTSAX Vanguard Total Stock Market Index
8% VTIAX Vanguard Total International

Roth IRA
19% VTIAX Vanguard Total International

Current 401k (~$60K)- no match
20% FXNAX Bond index fund 0.03%
18% FXAIX P Fidelity 500 index fund  0.01%

Contributions in 2020
$19,000 to new 401k with match
$6,000 backdoor roth
~$5,000 taxable

New 401K (2020)- 3% employer match
Available funds in 401K: Sorry I do not have Tickers available
Schwab US Lrge cap ETF 0.03%
Schwab US Lrge cap growth ETF 0.04%
Schwab US large cap value ETF 0.04%
Schwab mid cap ETF 0.05%
Vanguard mid cap growth ETF0.07%
Vanguard mid cap value ETF 0.07%
Schwab US small cap ETF 0.05%
Vanguard small cap growth ETF0.07%
Vanguard small cap value 0.07%
Schwab emerging market 0.13%
Schwab international equity ETF 0.06%
Shwab us reit ETF 0.07%
Schwab US TIPS ETF 0.05%
Schwab intermediate term US Trs ETF 0.06%
Schwab US aggregate bond ETF 0.04%
Vanguard short term gvt bond ETF 0.07%


Questions:
1. I will be changing jobs next month. A 401k is available immediately with 401k employer match after the first year. Although I like Vanguard for simplicity I was thinking of choosing Schwab US large/mid cap for the low expenses to make up for the FXAIX I currently have in my 401K and Schwab US aggregate for the bond portion. Do you agree?
2. Should I transfer my current 401k for ease or keep the money where it currently is to take advantage of the FXAIX and FXNAX low expenses?
Congratulations on the new job!

1. Your choices are all good candidates, so it's hard to go wrong here. I would probably go with the Schwab large cap and small cap in a 4:1 mix to emulate a total market fund.

2. The fees are low on all of your listed funds. With $60k in the old 401k your annual fee is about $12. Consolidating into the new 401k would makes things a lot easier, but could cost you a few bucks a year in increased fees. I might consider holding nothing but FXAIX in the old 401k and pay just $6 a year in fees.

User avatar
ruralavalon
Posts: 16360
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: New Job, New 401K. On the right track?

Post by ruralavalon » Tue Oct 08, 2019 11:18 am

haymac wrote:
Mon Oct 07, 2019 7:44 pm
Salary: 120k
Emergency funds: eight months of expenses
Debt: Mortgage $1900/mo
Tax Filing Status: Single
Tax Rate: 24% Federal, 0% State
State of Residence: TN
Age: 33
Asset allocation: 80% stocks
International allocation: 30% of stocks
Bond allocation: 20%

Current retirement assets: ~$165k

Taxable
35% VTSAX Vanguard Total Stock Market Index
8% VTIAX Vanguard Total International

Roth IRA
19% VTIAX Vanguard Total International

Current 401k (~$60K)- no match
20% FXNAX Bond index fund 0.03%
18% FXAIX P Fidelity 500 index fund  0.01%

Contributions in 2020
$19,000 to new 401k with match
$6,000 backdoor roth
~$5,000 taxable

New 401K (2020)- 3% employer match
Available funds in 401K: Sorry I do not have Tickers available
Schwab US Lrge cap ETF 0.03%
Schwab US Lrge cap growth ETF 0.04%
Schwab US large cap value ETF 0.04%
Schwab mid cap ETF 0.05%
Vanguard mid cap growth ETF0.07%
Vanguard mid cap value ETF 0.07%
Schwab US small cap ETF 0.05%
Vanguard small cap growth ETF0.07%
Vanguard small cap value 0.07%
Schwab emerging market 0.13%
Schwab international equity ETF 0.06%
Shwab us reit ETF 0.07%
Schwab US TIPS ETF 0.05%
Schwab intermediate term US Trs ETF 0.06%
Schwab US aggregate bond ETF 0.04%
Vanguard short term gvt bond ETF 0.07%


Questions:
1. I will be changing jobs next month. A 401k is available immediately with 401k employer match after the first year. Although I like Vanguard for simplicity I was thinking of choosing Schwab US large/mid cap for the low expenses to make up for the FXAIX I currently have in my 401K and Schwab US aggregate for the bond portion. Do you agree?
I would just use Schwab US Large cap ETF (SCHX) 0.03% for the domestic stocks. This ETF uses the Dow Jones U.S. Large-Cap Total Stock Market Index.

Schwab US aggregate bond ETF (SCHZ) 0.04% is a good choice for your bond allocation.

2. Should I transfer my current 401k for ease or keep the money where it currently is to take advantage of the FXAIX and FXNAX low expenses?
I would rollover the old 401k into the new 401k, to simpify. The tiny expense ratio advantage in the o!d 401k is so little as to be meaningless in my opinion.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

HomeStretch
Posts: 2036
Joined: Thu Dec 27, 2018 3:06 pm

Re: New Job, New 401K. On the right track?

Post by HomeStretch » Tue Oct 08, 2019 12:13 pm

Congratulations on the new job!

Agree with rolling over old 401k to new 401k for simplicity despite the minor additional cost.

Mortgage refinancing rates have come down so depending on your rate, look for an opportunity to refinance if the pay back makes sense.

If your emergency fund account yield is < 2%, your Vanguard Taxable account has good money market fund (MMF) rates. VMMXX Prime MMF has a 7-day compound SEC yield of 2%.

Topic Author
haymac
Posts: 23
Joined: Thu Nov 29, 2018 4:28 pm

Re: New Job, New 401K. On the right track?

Post by haymac » Wed Oct 09, 2019 8:22 am

[/quote]
I would just use Schwab US Large cap ETF (SCHX) 0.03% for the domestic stocks. This ETF uses the Dow Jones U.S. Large-Cap Total Stock Market Index.

Schwab US aggregate bond ETF (SCHZ) 0.04% is a good choice for your bond allocation.
[/quote]

Thank you for your help!

Topic Author
haymac
Posts: 23
Joined: Thu Nov 29, 2018 4:28 pm

Re: New Job, New 401K. On the right track?

Post by haymac » Wed Oct 09, 2019 8:27 am

HomeStretch wrote:
Tue Oct 08, 2019 12:13 pm
Congratulations on the new job!

Agree with rolling over old 401k to new 401k for simplicity despite the minor additional cost.

Mortgage refinancing rates have come down so depending on your rate, look for an opportunity to refinance if the pay back makes sense.

If your emergency fund account yield is < 2%, your Vanguard Taxable account has good money market fund (MMF) rates. VMMXX Prime MMF has a 7-day compound SEC yield of 2%.
Thank you for your help on this!

Mortgage rate is 3.5% and emergency is 1.88%. I'll look into VMMXX.

Topic Author
haymac
Posts: 23
Joined: Thu Nov 29, 2018 4:28 pm

Re: New Job, New 401K. On the right track?

Post by haymac » Wed Oct 09, 2019 8:28 am

ExitStageLeft wrote:
Mon Oct 07, 2019 7:57 pm
haymac wrote:
Mon Oct 07, 2019 7:44 pm
Salary: 120k
Emergency funds: eight months of expenses
Debt: Mortgage $1900/mo
Tax Filing Status: Single
Tax Rate: 24% Federal, 0% State
State of Residence: TN
Age: 33
Asset allocation: 80% stocks
International allocation: 30% of stocks
Bond allocation: 20%

Current retirement assets: ~$165k

Taxable
35% VTSAX Vanguard Total Stock Market Index
8% VTIAX Vanguard Total International

Roth IRA
19% VTIAX Vanguard Total International

Current 401k (~$60K)- no match
20% FXNAX Bond index fund 0.03%
18% FXAIX P Fidelity 500 index fund  0.01%

Contributions in 2020
$19,000 to new 401k with match
$6,000 backdoor roth
~$5,000 taxable

New 401K (2020)- 3% employer match
Available funds in 401K: Sorry I do not have Tickers available
Schwab US Lrge cap ETF 0.03%
Schwab US Lrge cap growth ETF 0.04%
Schwab US large cap value ETF 0.04%
Schwab mid cap ETF 0.05%
Vanguard mid cap growth ETF0.07%
Vanguard mid cap value ETF 0.07%
Schwab US small cap ETF 0.05%
Vanguard small cap growth ETF0.07%
Vanguard small cap value 0.07%
Schwab emerging market 0.13%
Schwab international equity ETF 0.06%
Shwab us reit ETF 0.07%
Schwab US TIPS ETF 0.05%
Schwab intermediate term US Trs ETF 0.06%
Schwab US aggregate bond ETF 0.04%
Vanguard short term gvt bond ETF 0.07%


Questions:
1. I will be changing jobs next month. A 401k is available immediately with 401k employer match after the first year. Although I like Vanguard for simplicity I was thinking of choosing Schwab US large/mid cap for the low expenses to make up for the FXAIX I currently have in my 401K and Schwab US aggregate for the bond portion. Do you agree?
2. Should I transfer my current 401k for ease or keep the money where it currently is to take advantage of the FXAIX and FXNAX low expenses?
Congratulations on the new job!

1. Your choices are all good candidates, so it's hard to go wrong here. I would probably go with the Schwab large cap and small cap in a 4:1 mix to emulate a total market fund.

2. The fees are low on all of your listed funds. With $60k in the old 401k your annual fee is about $12. Consolidating into the new 401k would makes things a lot easier, but could cost you a few bucks a year in increased fees. I might consider holding nothing but FXAIX in the old 401k and pay just $6 a year in fees.
I appreciate you looking at this for me!

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