Can someone critique our "mess"?

[bubba]

We have old 401Ks scattered and as we are getting seriously about FIRE prep, we've decided to do something with all these funds. Here is the breakdown:

Fidelity Cash Reserves 1.279%
Vanguard Prime Money Market Fund 1.895%
Vanguard Star Fund 1.852%
Vanguard Target Retirement 2025 1.865%
Vanguard Windsor II Fund 3.775%
Stable Value Fund 5.744%
American Funds Balanced Fund 5.427%
UBS Large Cap Growth Equity Fd 8.805%
UBS (company stock) 11.161%
UBS US Allocation Fund 6.966%
Janus Growth & Income Fund 8.844%
Janus Fundamental Equity Fund 7.456%
Am Cent Small Co Fund 0.336%
Franklin Bal Sheet Inv Fd 0.616%
JPM Mid Cap Value A 0.441%
Oppenheimer Global Fund Cl A 0.172%
VanEck Global Hard Assets Fund 0.172%
Fidelity Capital Appreciation Fund 6.612%
American Funds Fundamental Investors 2.753%
American Funds Washington Mutual 2.675%
Baron Asset Fund 5.519%
Fidelity Capital Appreciation Fund 2.628%
Fidelity Equity Income Fund 2.746%
Fidelity Real Estate Investment Fund 1.621%
Janus 20 Fund 5.455%
BP (company stock) 3.185%

What would you change and why? Appreciate any help.

 

[perinova]

About two years ago I was pretty much in a similar situation five 401ks, etc.
I already had some Vanguard Total Stock, Total Intl and Total Bonds as well as a Target Retirement Account
I personally reviewed the allocation I wanted and combined almost everything into a single roll over IRA and into a Taxable Account. Into Vanguard Total Index Funds (Target Retirement also possible). That makes for an easy reallocation 8)
Of course if some funds are into taxable accounts you would have to consider the Cap Gain Tax issue.
Since you also have the Star fund you could also consider that one.
Another thing: you have a lot of UBS. (Often not advised to have that much into a single stock)

 

[simple girl]

Wow, that's a lot of funds! It looks similar to what we had a few years ago, LOL. It can be difficult to stay streamlined when you have multiple old 401K'S.

What we did was first figure out what our ideal asset allocation would be. ie. not just % stock/bond/cash, but also within stocks, what % we wanted in large, mid, small caps, REITS, international, etc.

Then we analyzed our current holdings to see what we actually had according to the various categories. This allowed us to get rid of certain "loser" funds and move the $ into better funds we already had in that particular category.

We also decided to rollover one old 401K completely into Vanguard b/c the funds weren't very good and the fees were higher than we liked.

For specific advisement on the funds you have, I'm sure you'll get feedback from some of the more seasoned investors on the forum.

 

[yakers]

That would be too many funds for me, but I like things simple, my primary retirement fund is a Target Retirement fund. It takes a lot of time & energy to monitor that many funds for performance, risk, changes of objectives & managers. So I would consolidate where I can as long as cap gains taxes are not too much. But I line that you have funds and individual stocks. That can help later for tax management.
I like Vanguard but there are several good (and many bad) fund firms out there. American funds is one of the few loaded funds I would possible hold if I had already paid the load.

 

[FinanceDude]

There's overlap galore in there. Good news is they are 401K's, so no capital gains problems if you sell and reallocate.

I would make a spreadsheet as follows:


Fund Asset Class Expense Ratio 3YR Perf 5YR Perf 10YR Perf


List them all, and it will be easier to decide what goes and what stays. I wouldn't just sell it all and put it in a Target Fund...........

 

[mickeyd]

Hey Bubba,

Wow! I count 23 funds and 2 bunches of stock. Quite a collection you have.

If your intent is to roll it all over to one MF company, say Vanguard, I would first decide what my asset allocation (AA) is (i.e 60/40 or 50/50) and exchange all of your funds for two Vanguard funds for right now. If your AA is say 60/40 I would put 60% in the Vanguard Total Stock Market Index fund and 40% in the Total Bond Index fund.

If you have not done so already, I suggest that you read a few books in investing. "Boglehead's Guide to Investing" is a good starter. Books will help you arrive at an AA that fits your needs.

After you get it all exchanged to these two funds, you can then break it up into no more that 8 more funds (i.e. TIPS, SCV, REIT, Value, Total International etc) depending on your AA. Since these are all tax deferred funds, none of this would be taxable.

 

[FIRE'd@51]

First, I would find out who the custodians are for each of the 401k's. If many have the same custodian, it might be easier to first rollover to an IRA with that custodian. The problem here is, when you make custodian-to-custodian transfers, you lose all control over when assets are sold and bought. You will be out of the market while assets transfer, which can take several days, or maybe even weeks. Of course, that can work for you or against you, but it's a bit of a crap shoot. I would talk to the custodians involved in the transfers, and carefully organize the process, so that you minimize the time assets are not invested in your desired allocations. With so many funds, you really need to carefully organize your plan.

Also, be sure to do direct rollovers in order to avoid the 20% tax withholding on 401k distributions.

 

[cute fuzzy bunny]

Other than move it all into target retirement 2025?

Wouldn't change a thing.