I have a delimma, and I need some advice about the best long term investing strategy. My current situation:
I LBYM on a very small portion of my income. So that leaves most of my paycheck to go into savings of some kind. The first thing that gets funded is my Roth IRA. (usually at the beginning of the year, just to get it out of the way) That leaves about $600 every two weeks that can either go into a 401k or into a long term taxable account. Given the sh****ness of my 401k providers mutual fund options, I am wondering if I should continue investing in it.
John Hancock is the provider for my 401k, and they actually offer index funds, but the er of these are close to 1%
I am currently putting about $600 every 2 weeks into my 401k WITH NO COMPANY MATCH- into the following funds ...
JH Intl Index JEIEX er: .98
JH Small cap index JESIX er: .93
JH Total bond JEBNX er: .93
JH Mid cap index JECIX er: .91
JH S&P500 index JEINX er: .91
Do you all think that I would be doing myself a favor by stopping the funding to my 401k, and instead investing in some Vanguard or Fidelity index funds of the same type in a taxable account?
On the surface, in a taxable account I could easily beat the expense ratios since I can choose from anything I want. But then I would lose my tax deferred status, and then get the cap gains tax (and who knows what else) when I go to withdraw in 2040.
fwiw, my federal tax bracket will not change if I stop contributing to a 401k...or at least, I will contribute enough to a 401k so that it doesnt.)
Thanks for the help.
Mill
I LBYM on a very small portion of my income. So that leaves most of my paycheck to go into savings of some kind. The first thing that gets funded is my Roth IRA. (usually at the beginning of the year, just to get it out of the way) That leaves about $600 every two weeks that can either go into a 401k or into a long term taxable account. Given the sh****ness of my 401k providers mutual fund options, I am wondering if I should continue investing in it.
John Hancock is the provider for my 401k, and they actually offer index funds, but the er of these are close to 1%
I am currently putting about $600 every 2 weeks into my 401k WITH NO COMPANY MATCH- into the following funds ...
JH Intl Index JEIEX er: .98
JH Small cap index JESIX er: .93
JH Total bond JEBNX er: .93
JH Mid cap index JECIX er: .91
JH S&P500 index JEINX er: .91
Do you all think that I would be doing myself a favor by stopping the funding to my 401k, and instead investing in some Vanguard or Fidelity index funds of the same type in a taxable account?
On the surface, in a taxable account I could easily beat the expense ratios since I can choose from anything I want. But then I would lose my tax deferred status, and then get the cap gains tax (and who knows what else) when I go to withdraw in 2040.
fwiw, my federal tax bracket will not change if I stop contributing to a 401k...or at least, I will contribute enough to a 401k so that it doesnt.)
Thanks for the help.
Mill
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