Author Topic: 401k  (Read 3212 times)

Rcrim

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401k
« on: September 27, 2017, 11:59:44 AM »
Good afternoon. IM new to the forum. Little about my 401k. Currently 29 yrs old. Current balance is 82k. I put in 10% my company matches 6%.  Total of 16% being invested. Current salary 67k a year. We have mass mutal as a 401k. Any ideas would be great! Thanks in advance

Here are my current investment.
Franklin Rising Dividends Adv   31.96%


  Victory S&P 500 Index A   16.06%


  Putnam Income-Y   13.82%


  Delaware Smid Cap Growth-Inst   9.39%


  MFS Government Securities Fd-R4   9.02%


  Dreyfus Opportunistic Midcp Vl-I   4.96%


  Oppenheimer Main Street Mid Cp Y   4.96%


  Clearbridge Aggressive Growth-I   4.82%


  Other   5.01%


Available investments


Franklin Rising Dividends Adv
   U.S. Stocks
Victory S&P 500 Index A
   U.S. Stocks
Putnam Income-Y
   Bonds
Delaware Smid Cap Growth-Inst
   U.S. Stocks
MFS Government Securities Fd-R4
   Bonds
Dreyfus Opportunistic Midcp Vl-I
   U.S. Stocks
Oppenheimer Main Street Mid Cp Y
   U.S. Stocks
Clearbridge Aggressive Growth-I
   U.S. Stocks
American Fds Grth Fd Of Amer R4
   U.S. Stocks
Opp Limited Term Bond-I
   Bonds
American Funds US Govt MM R5
   Cash
Columbia Floating Rate-R5
   Bonds
MFS International Value-R4
   Global/International
MFS Lifetime 2020 Fund-R4
   Asset Allocation
MFS Lifetime 2030 Fund-R4
   Asset Allocation
MFS Lifetime 2040 Fund-R4
   Asset Allocation
MFS Lifetime Fund 2050-R4
   Asset Allocation
MFS Lifetime Income-R4
   Asset Allocation
MFS Total Return Fund-R4
   Balanced

MFS Value R4
   U.S. Stocks
Mass Investors Growth Stk Fd-R4
   U.S. Stocks
Oppenheimer Intl Growth-Y
   Global/International

PIMCO Commodity Real Ret STR-A
   U.S. Stocks

Victory Munder Mid-Cap Core Gr-Y
            


boarder42

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Re: 401k
« Reply #1 on: September 27, 2017, 12:11:24 PM »
please put together more information.  the most important thing here is expense ratios on the funds.  and knowing what you want your AA to be as well as what other places you're keeping your money.  i can tell you that from what you're in its more complicated than it should be and you're likely paying higher fees than you should be but please just pull the report that shows exp ratios on these funds and put that in here. I could go find it on morningstar but you can just pull it.

Another Reader

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Re: 401k
« Reply #2 on: September 27, 2017, 12:18:17 PM »
I see the word "index" in only one fund - the S&P 500.  Depending on the expense ratios, that's probably the only investment I would consider using. 

Your 401 (k) has really, really bad choices.  Depending on the size of the company and how it feels about employee involvement in such matters, it might be time to inquire politely if a new vendor with more favorable fund choices might be considered when the contract is renewed.

Interest Compound

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Re: 401k
« Reply #3 on: September 27, 2017, 12:55:00 PM »
Personally, I'd put it all in the S&P 500 Index fund and call it a day.

Normally I'd go down the path of providing links so you can read up and determine your desired Asset Allocation (your stock/bond brekadown), but for this the answer is simple. The S&P500 Index fund is the only option listed that you should consider. If you want bonds, put them in your IRA.

Car Jack

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Re: 401k
« Reply #4 on: September 27, 2017, 01:10:32 PM »
Personally, I'd put it all in the S&P 500 Index fund and call it a day.

Normally I'd go down the path of providing links so you can read up and determine your desired Asset Allocation (your stock/bond brekadown), but for this the answer is simple. The S&P500 Index fund is the only option listed that you should consider. If you want bonds, put them in your IRA.

I've had a horrible Mass Mutual 401k at my last job.  Look at the ERs.  I expect that if they're anything like mine, you'll be looking forward to the day you leave the job and can transfer them to a low cost IRA.  In any case, I agree with Interest Compound to put it all in the S & P 500.  Start funding a Roth.  You can start to diversify across accounts as you build your stache.

Rcrim

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Re: 401k
« Reply #5 on: September 27, 2017, 01:13:47 PM »
Boarder the only way to show expense ratios is to click each fund fact sheet on each fund. Sorry.   Our company supplies us with advisors from ubs. The advisor tells me her opinion would be to invest 100% into the 
MFS Lifetime Fund 2050-R4. For those also asking I don't have a ira either.







   

seattlecyclone

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Re: 401k
« Reply #6 on: September 27, 2017, 01:15:59 PM »
Take a look at the sticky Investment Order thread. With a higher-fee 401(k) such as yours, the standard advice is to invest up to the maximum match, then fill up your IRA, and only contribute more to your 401(k) after that is done.

Another Reader

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Re: 401k
« Reply #7 on: September 27, 2017, 01:32:34 PM »
What is the expense ratio on the Lifetime fund?  Is it comprised of other funds?  If so, what are the expense ratios of those funds?  These funds charge you twice for expenses.

Likely you are being given bad advice with the excuse that this fund is "set it and forget it" and offers diversification.  If it doubles up on fund expenses, you are being robbed blind.

Your 401 (k) vendor is just plain awful.  If the plan is large enough, it may be in the Brightscope database.  Might be worth seeing if it is rated there.

Agree with the advice to put the contributions into the least expensive index and index-like funds.  If the fees are outrageous, diversify outside the 401 (k).


dandarc

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Re: 401k
« Reply #8 on: September 27, 2017, 01:55:27 PM »
Boarder the only way to show expense ratios is to click each fund fact sheet on each fund. Sorry.   Our company supplies us with advisors from ubs. The advisor tells me her opinion would be to invest 100% into the 
MFS Lifetime Fund 2050-R4. For those also asking I don't have a ira either.
You might not know this, but sometimes the fees paid by 401Ks are substantially different from what we can find out by Googling.  Seems you also don't know that fees are the best predictor of fund performance.  If you want good advice from the forum, spend a few minutes and compile better information.

Also - you better hope the fees your 401K pays are a hell of a lot better than the publicly available information.  Because class A shares of what should be your cheapest option - the S&P 500 index fund come with a 2.5% front load a .58% ER according to google.  That's an absurd price to pay for that type of fund - really whoever put this 401K together is just begging to be sued over things like this.  Might want to mention to your employer that they have a fiduciary responsibility to not let your advisors completely rip off the 401K participants.

Rcrim

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Re: 401k
« Reply #9 on: September 27, 2017, 02:33:52 PM »
For those asking this is  Total Annual Operating Expense.  I had to pencil them down.


Franklin Rising Dividends Adv
   U.S. Stocks   0.66%
Victory S&P 500 Index A
   U.S. Stocks .
58%
Putnam Income-Y
   Bonds 0.62%
Delaware Smid Cap Growth-Inst
   U.S. Stocks 0.94%
MFS Government Securities Fd-R4
   Bonds  0.63%
Dreyfus Opportunistic Midcp Vl-I
   U.S. Stocks 0.90%
Oppenheimer Main Street Mid Cp Y
   U.S. Stocks 0.86%
Clearbridge Aggressive Growth-I
   U.S. Stocks 0.84%
American Fds Grth Fd Of Amer R4
   U.S. Stocks  0.68%
Opp Limited Term Bond-I
   Bonds  0.40
American Funds US Govt MM R5
   Cash 0.40%
Columbia Floating Rate-R5
   Bonds 0.76%
MFS International Value-R4
   Global/International  0.76%
MFS Lifetime 2020 Fund-R4
   Asset Allocation 0.82%
MFS Lifetime 2030 Fund-R4
   Asset Allocation 0.87%
MFS Lifetime 2040 Fund-R4
   Asset Allocation 0.91%
MFS Lifetime Fund 2050-R4
   Asset Allocation 1.08%
MFS Lifetime Income-R4
   Asset Allocation 0.78%
MFS Total Return Fund-R4
   Balanced 0.49%

MFS Value R4
   U.S. Stocks  0.89%
Mass Investors Growth Stk Fd-R4
   U.S. Stocks 0.49%
Oppenheimer Intl Growth-Y
   Global/Internationa l 0.89%

PIMCO Commodity Real Ret STR-A
   U.S. Stocks  1.53%

Victory Munder Mid-Cap Core Gr-Y  1.06%

boarder42

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Re: 401k
« Reply #10 on: September 27, 2017, 02:41:28 PM »
Figured they would be ugly.  i'd probably put it in the S&P those expense ratios blow. 

Expenses are what matter for the most part.  Doing that bit of work should have served you well to understand what the exp ratios are and they are insanely high Vanguard's S&P 500 index is .04% - so you're paying 1350% in fees more than at vanguard.  - This site lives by a mantra that you cant be the market so paying extra for an actively managed fund or almost double in your 401k's place for a target date for the auto rebalancing isnt worth it. 

All that being said its totally worth the 6% you're getting to put up to the match here.  Its probably even worth maxing it out after you max out an IRA per the investment order linked above or an HSA if you have that option. 


dandarc

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Re: 401k
« Reply #11 on: September 27, 2017, 02:56:43 PM »
Try and see if the 401K has that front-load on the S&P 500 fund waived somehow - Google says MUXAX has a 2.5% front load.  Depending on how long you're with the company, that ranges from "a huge deal" to "not ideal, but not that bad".

To use boarder42's example - Vanguard's S&P 500 Index has no load.  So you're paying 13.5 times as much annually and you get to start 2.5% behind compared to that fund.

Another Reader

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Re: 401k
« Reply #12 on: September 27, 2017, 03:25:16 PM »
Some quick research shows the fund your "adviser" recommends is a fund of funds.  So you are paying a fund fee for the target fund PLUS the fees on the underlying funds.  Highway robbery. 

The loads are usually waived in 401 (k) and similar plans.  The vendor tells their client what a great deal they are getting because the load is waived.  Unless the person at your company that manages the 401 (k) is sophisticated, they don't see the real problem, which is the total cost and poor performance of many of the offerings.

Your "adviser" works for the 401 (k) vendor, not for you.  Managing your investments is not rocket science.  A little time spent learning the basics will save you tens of thousands of dollars over your lifetime. 

Rcrim

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Re: 401k
« Reply #13 on: September 27, 2017, 04:30:28 PM »
Appreciate all the info guys! Like I said just knew to it all. Trying to reach the big goal of retirement.

Radagast

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Re: 401k
« Reply #14 on: September 27, 2017, 07:23:22 PM »
Upon further consideration, I recommend going all in "Mass Investors Growth Stk Fd-R4." It has a lower expense ratio than the S&P index fund, which is a good sign. That S&P fund has also matched or trailed Mass Investors Growth over pretty much all periods. If the S&P500 fund has a load you must pay then the choice is obvious: go all in the Mass Investors Growth fund, after first maxing out your IRA, HSA, and whatever other options you have with actual good funds. Side note, apparently Mass Investors Growth is one of the oldest funds in the country.

Interest Compound

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Re: 401k
« Reply #15 on: September 27, 2017, 08:41:44 PM »
That S&P fund has also matched or trailed Mass Investors Growth over pretty much all periods.

Rcrim, you said you're new right? Here's a lesson for you. Can you explain why this is the worst advice ever?

Interest Compound

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Re: 401k
« Reply #16 on: September 27, 2017, 08:43:49 PM »
For those also asking I don't have a ira either.

Then get one! It's easy, and you'll have access to much better options :)


Radagast

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Re: 401k
« Reply #17 on: September 27, 2017, 10:26:32 PM »
That S&P fund has also matched or trailed Mass Investors Growth over pretty much all periods.

Rcrim, you said you're new right? Here's a lesson for you. Can you explain why this is the worst advice ever?
Oh, give me a break. The index fund has a load and a higher expense ratio, so it has to prove itself in this case (and it doesn't, really). Back testing is bad in isolation, but you can check if the non-index is vaguely credible. If the load is waived, then the index fund might be the better choice.

talltexan

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Re: 401k
« Reply #18 on: September 28, 2017, 07:31:17 AM »
Paul Merriman recently issued recommended allocations for the 401K plans of the 100 largest employers in the country. If you work for one of these, you can go to http://paulmerriman.com/401k-landing/ and see his recommended mix.

Paul is sympathetic to the low-fee index investing many people here advocate, but in addition, he advocates a tilt toward smaller cap and value-stocks.