Author Topic: Choosing 401k Fund  (Read 366 times)

aes421

  • 5 O'Clock Shadow
  • *
  • Posts: 15
  • Age: 25
Choosing 401k Fund
« on: October 25, 2018, 12:04:41 PM »
Hello all,

I am new to this investment thing.  I have been working for 2 years now and have 40k saved up in my 401k.  I just recently realized we have options of what fund to invest in.  By default I am in a "Smart Mix Aggressive Fund"
---------------------------------
40% Large Cap
17% International
10% Mid/Small Cap
10% Emerging Markets Stock
9% Real estate
5% High yield bonds
5% Investment grade bonds
3% Emerging market bonds
---------------------------------

The issue is it has a 0.62% fee.  I discovered we have a "Stock Index Fund" that seems to just track the S&P 500 and has a 0.10% fee.

Would it be a smart idea for me to move all 40k over to the Stock Index fund?  Will I lose any money by changing funds?

I also have 10k in VFINX S&P 500 Fund in my Roth IRA.

RWD

  • Magnum Stache
  • ******
  • Posts: 3044
  • Location: Mississippi
Re: Choosing 401k Fund
« Reply #1 on: October 25, 2018, 12:35:17 PM »
The issue is it has a 0.62% fee.  I discovered we have a "Stock Index Fund" that seems to just track the S&P 500 and has a 0.10% fee.

Would it be a smart idea for me to move all 40k over to the Stock Index fund?
Yes. Going for low expense ratio index funds is usually the best plan.

Will I lose any money by changing funds?
No. Because it's in a tax sheltered account there will be no tax consequence for selling/buying within the account.

MustacheAndaHalf

  • Handlebar Stache
  • *****
  • Posts: 1671
Re: Choosing 401k Fund
« Reply #2 on: October 26, 2018, 06:48:42 AM »
If their S&P 500 index fund charges a reasonable 0.10%, they might also have reasonable choices for international.  Does your plan have any international index funds with low fees?

aes421

  • 5 O'Clock Shadow
  • *
  • Posts: 15
  • Age: 25
Re: Choosing 401k Fund
« Reply #3 on: October 26, 2018, 07:18:53 AM »
If their S&P 500 index fund charges a reasonable 0.10%, they might also have reasonable choices for international.  Does your plan have any international index funds with low fees?

0.10 is the lowest.
Stock Index Fund - 0.1%
International stock 0.60%
Mid Cap Stock - 0.61%
Emerging Market Stock - 0.88%
Small Cap Stock - 0.79%
Large Cap Stock -0.39%

Emerging Market Bond - 0.66%
Long Bond - 0.37%
US Bond - 0.28%

Conservative Mix - 0.36%
Moderate Mix - 0.52%
Aggressive Mix 0.64%