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403b choices
Old 07-21-2010, 07:57 AM   #1
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Posts: 16
403b choices


I'm 53 & still working. Would love to RE but realistically will be working another 7-9 years due to poor saving in my 20s/30s and lower expectations on returns over the next decade. So I'm doing everything within my control to improve post-retirement situation (budgeting, increasing savings). But would appreciate advice on how to diversify savings & allocate future deposits within the limited choices of my 403b.

(edited to add: I have a small Roth account with T Rowe Price. But this 403b & SS will provide the majority of my retirement income. Working on budgets & estimates. Thinking that SS might meet 50% and 3% WR from savings would provide other 50%.)

What would you do if these were your options with expense ratios (gross%/net%)........

TFLICGuarPool - Interest rate 3.5% for deposits 1/1/2010-12/31/2010
TAP Instl Mny Mkt (0.62/0.50)

PIMCO Totl Rtrn (0.89/0.71)

Black Rck Eqty Div (1.11/1.11)
Vanguard 500 Index (0.18/0.18)
Amer Fds Grwth Fd (0.70/0.70)

TAP Instl Mid Value (1.05/0.90)
Vanguard MdCap Idx (0.27/0.27)
Frst Amer MdCap Gr (1.23/1.23)
Vanguard SmCap Idx (0.28/0.28)
Virtus Qual SmCp (1.84/1.45)
Baron SmCap (1.34/1.34)

Amer Fds Europac (0.86/0.86)

Amer Fds Income (0.70/0.70)
Black Rck LP 2020 (1.19/0.85)
Black Rck LP 2030 (1.20/0.85)
Black Rck LP 2040 (1.20/0.85)
Black Rck LP Retire (1.20/0.85)


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Old 07-21-2010, 08:05 AM   #2
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Welcome. You will get a better answer if you list the expense ratios for these funds. And you owe it to yourself to know what they are.

Yes, I have achieved work / life balance.
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Old 07-21-2010, 08:08 AM   #3
Dryer sheet wannabe
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Thanks! I'll edit to add that info.
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Old 07-21-2010, 08:36 AM   #4
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You don't mention whether this 403b account represents your only savings for retirement. My investments consist of a mix of a US equity index fund, an international equity index fund and a bond fund, as well as about 3 years expenses in a savings account.

The asset types you hold in your other investments may affect what you hold in your 403b, but I would definitely make sure that the Vanguard 500 Index is part of your investment plan. The low expense ratio makes it very appealing.

At this stage in your professional life, you probably have a pretty good idea what your income will be from social security. If it will be providing a significant portion of your retirement income, you may feel confident enough to be heavily invested in equities in your 403b; that is your decision of course. I'm sure others will have more detailed responses.

I would definitely consider the Vanguard 500 Index though.
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Old 07-21-2010, 08:56 AM   #5
Dryer sheet wannabe
Join Date: Jul 2010
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Major Tom,

Thanks for the feedback! Vanguard is on my list.

I'm just beginning to work on a retirement budget. At first glance I'm thinking that early SS will cover 50% & 50% will come from savings (mostly 403b, small Roth & cash accounts).

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Old 07-23-2010, 09:03 AM   #6
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I think one thing you should consider before picking individual funds is what is your overall asset allocation? What percentage do you want in your portfolio for bonds / stocks / international etc? Once you figure this out, it will be easier to pick funds. Do you have investments in taxable accounts?

For my wife and I, we had limited choice and space in retirement funds. So what we tended to do was consider both expense ratio and tax efficiency. So bonds tended to go in deferred but we also invested in a 500 fund even though it naturally tax efficient because of the lousy 401k choices (i.e., many of the funds had high expense ratios).

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