401K question about investment selection

[Fermion]

I have about 30% of our 401K in cash (short term investment paying under 0.5%) and the rest in S&P500. Obviously 20/20 I should have been 100% stocks this year but I would like to have some stability there. The bond funds in the 401K have had negative returns for 2021 which means the cash actually was not as bad as it first looks (Pimco total return and Vanguard VBIPX).


I think inflation is sticky and I would like to put the 30% (25% now because the stock portion has grown) into TIPS but I don't have that selection in the 401K. This is at Fidelity.

Should I break away a portion of the 401K into a IRA so I could find a TIPS ETF?

 

[RetiredHappy]

2 popular TIPS etfs are SCHP and TIP, available at Fidelity IRAs and taxable account. I don't know anything about your 401K account at Fidelity.

TIPS etfs are also underperforming. My husband has 12% in his IRA and we both have about 3% in our taxable.

 

[RunningBum]

Is this your only investment account? You should manage your AA across all accounts, not just one. Use https://www.bogleheads.org/wiki/Tax-efficient_fund_placement as a guide for what to hold in which type of account, though you may have to alter it due to fund unavailability in some accounts.

Cash fixed income investments sometimes are much better in a 401K plan than you could get otherwise so depending upon the rate you may want to keep it.

I don't think too many 401K accounts can be moved all or in part while you are still working. I know mine weren't but I think I've heard of a couple cases where it was allowed.

 

[Fermion]

No, not our only investment account but it is the largest by far. I have started to add I-bonds to some of our after tax accounts but as you probably know, those are not available to IRA or 401K. We are retired, so I think there is the option of rolling over part of the 401K to a IRA (not sure if you can just do part of it but I think you can). I have been both lazy and hesitant though to change the 401K as I do like the creditor protection a 401K has that may or may not be available in a IRA.

 

[Out-to-Lunch]

Is a Fidelity BrokerageLink available in your 401(k)? If it is, you could move some of your stash into the brokerage window to buy TIPS or a TIPS fund.