Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Which of these 401(K) choices would be your pick?
Old 09-20-2012, 06:55 PM   #1
gone traveling
 
Join Date: Jun 2012
Location: Austin
Posts: 245
Which of these 401(K) choices would be your pick?

In January, my company will be switching 401(K) from Valic to another company.

Below are the choices - I would consider myself a moderate-risk investor seeking above average returns.

Which of these would be your pick?

Vanguard Prime Money Market InvMoney Market
Vanguard Short-Term Federal Adm
Vanguard Interm-Term Treasury Adm
Vanguard Inflation-Protected Secs Adm
Vanguard Interm-Term Bond Index Signal
PIMCO High Yield Instl
Vanguard Equity-Income Adm
Vanguard 500 Index Signal
American Funds AMCAP R6
Vanguard Selected Value Inv
Vanguard Mid Cap Index Signal
PRIMECAP Odyssey Aggressive Growth
DFA US Targeted Value I
Vanguard Small Cap Index Signal
Vanguard Small Cap Growth Index Adm
American Funds EuroPacific Gr R6
Vanguard Total Intl Stock Index Signal
Oppenheimer Developing Markets I
Vanguard Precious Metals and Mining Inv
PIMCO Commodity Real Ret Strat Instl
Vanguard REIT Index Signal
Vanguard Target Retirement Income Inv
Vanguard Target Retirement 2015 Inv
Vanguard Target Retirement 2020 Inv
Vanguard Target Retirement 2025 Inv
Vanguard Target Retirement 2030 Inv
Vanguard Target Retirement 2035 Inv
Vanguard Target Retirement 2040 Inv
Vanguard Target Retirement 2045 Inv
Vanguard Target Retirement 2050 Inv
Vanguard Target Retirement 2055 Inv
Vanguard Target Retirement 2060 Inv
__________________

__________________
LakeTravis is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-20-2012, 08:33 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
I'd go with T.R. 2060 with a little REIT, small cap for spice. Move to earlier dates to add in some bonds, whatever those are...
__________________

__________________
Animorph is offline   Reply With Quote
Old 09-20-2012, 09:00 PM   #3
Thinks s/he gets paid by the post
photoguy's Avatar
 
Join Date: Jun 2010
Posts: 2,301
I think you need to figure out an overall asset allocation first and then piece together how your 401k can help fill the buckets.

Personally, I usually pick the funds that are most tax inefficient (throw off a lot of dividends, capital gains, etc.) with the lowest expense ratios (for that category).
__________________
photoguy is offline   Reply With Quote
Old 09-20-2012, 10:03 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,261
I'll give a very incomplete, but maybe helpful, answer - my daughter's boyfriend asked a similar question of me regarding his 401K options on his new job (a boyfriend with a job, and planning for the future - yes, we like him!).

I was ready to give the generic 'pick an AA, put it a mix of broad stock market index, and broad bond fund index, and let it roll' answer. But then I looked into those target funds. I never looked closely before, but I liked what I saw. I don't recall the details, so check for yourself, but from what I remember, the expenses were really low. That kinda makes sense, the average person going into a target fund isn't going to be moving their money around - they should be 'cheap' to service.

And they keep a pretty aggressive stock mix all through the early years, and only later do they start moving more to bonds. I had expected a straight age formula. Give them consideration.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 09-21-2012, 06:13 AM   #5
gone traveling
 
Join Date: Jun 2012
Location: Austin
Posts: 245
Thanks for the feedback. I realize I'm asking a broad question that doesn't necessarily accomodate specifics like AA and such, but I was just wondering what others might like out of the choices offered.

I'm reluctant to invest in any sort of bond fund right now, strictly because my understanding is bonds are destined to fall in price when rates eventually go up.

I'm also puzzled about internationals, which seem to have been providing terrible performance. Perhaps that's why they should be bought?

ERD50, I agree about the target funds - I have been gravitating to those lately because the ER's are pretty low and they seem to be pretty solid.

I suppose that in a sense I'm lucky to have to do this because my after-tax investments are in Wellington (50%), Wellesley (35%), and REIT (15%) and had those been choices in this 401(K) offering, I probably would have taken the lazy approach and mirrored what I already have.
__________________
LakeTravis is offline   Reply With Quote
Old 09-21-2012, 06:33 AM   #6
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,835
Quote:
Originally Posted by LakeTravis View Post

I suppose that in a sense I'm lucky to have to do this because my after-tax investments are in Wellington (50%), Wellesley (35%), and REIT (15%) and had those been choices in this 401(K) offering, I probably would have taken the lazy approach and mirrored what I already have.
FYI your after tax AA is not very tax efficient. The usual place to hold bond and REIT investments is in tax deferred accounts. You should consider arranging you funds to emphasize bonds and REITS in your tax deferred retirement accounts and equity index funds in your after tax accounts.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 65% Equity Funds / 20% Bonds / 7% Stable Value /3% Cash / 5% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Old 09-21-2012, 06:40 AM   #7
Recycles dryer sheets
timeasterday's Avatar
 
Join Date: Aug 2011
Location: GA
Posts: 211
What are the expense ratios? That's what I would look at first.
__________________
timeasterday is offline   Reply With Quote
Old 09-21-2012, 06:50 AM   #8
gone traveling
 
Join Date: Jun 2012
Location: Austin
Posts: 245
Quote:
Originally Posted by nun View Post
FYI your after tax AA is not very tax efficient. The usual place to hold bond and REIT investments is in tax deferred accounts. You should consider arranging you funds to emphasize bonds and REITS in your tax deferred retirement accounts and equity index funds in your after tax accounts.
Thanks for this. I'll definitely follow your advice.
__________________
LakeTravis is offline   Reply With Quote
Old 09-21-2012, 06:54 AM   #9
gone traveling
 
Join Date: Jun 2012
Location: Austin
Posts: 245
Quote:
Originally Posted by timeasterday View Post
What are the expense ratios? That's what I would look at first.
I should have posted them.

The Vanguard choices are relatively low (.10 - .20) while the non-Vanguard choices are noticeably higher (.3 - .9)
__________________

__________________
LakeTravis is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Why do 401k plans have so few fund choices? cscott711 FIRE and Money 21 01-07-2012 07:56 PM
401(k) Plan Asset Allocation, Account Balances, and Loan Activity In 2010 Tif7 FIRE and Money 1 12-24-2011 03:20 PM
Advice needed for a 401k plan or other option Mulligan FIRE and Money 15 11-11-2011 06:49 PM
Loans and Withdrawals from 401k and Defined Contribution Pension Plans nico08 FIRE and Money 0 09-11-2011 10:31 PM

 

 
All times are GMT -6. The time now is 08:38 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.