Author Topic: CREF 401K options  (Read 346 times)

rokel

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CREF 401K options
« on: May 06, 2018, 02:16:12 PM »

I've known for awhile that the 401k options available to me through my employer are not great in terms of fees but my employer has a good match so I've been contributing the lowest I need to in order to get their contributions. I was thinking about maxing out my 401k to help with income taxes, but I don't like my options. Any advice on what to do? There's only two Vanguard funds available to me, the rest are CREF

Here's some of the lowest fee options available to me and their expense ratio:

Vanguard Total International Stock Index Fund Admiral      Equities   Mutual Fund / Other   VTIAX   0.11%
CREF Equity Index Account (R2) CREF Variable Annuity / Class R2   QCEQPX   0.30%
Vanguard Dividend Growth Fund Investor      Equities   Mutual Fund / Inv   VDIGX   0.30%
CREF Inflation-Linked Bond Account (R2) Fixed Income   CREF Variable Annuity / Class R2   QCILPX   0.31%      
CREF Growth Account (R2) Equities   CREF Variable Annuity / Class R2   QCGRPX   0.32%      
CREF Social Choice Account (R2) Multi-Asset   CREF Variable Annuity / Class R2   QCSCPX   0.33%   
CREF Stock Account (R2) Equities   CREF Variable Annuity / Class R2   QCSTPX   0.37%   
CREF Global Equities Account (R2) CREF Variable Annuity / Class R2   QCGLPX   0.40%   

By the way, they currently have me in a CREF Lifecycle fund with a .8% ratio!       

electriceagle

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Re: CREF 401K options
« Reply #1 on: May 11, 2018, 08:33:29 PM »

I've known for awhile that the 401k options available to me through my employer are not great in terms of fees but my employer has a good match so I've been contributing the lowest I need to in order to get their contributions. I was thinking about maxing out my 401k to help with income taxes, but I don't like my options. Any advice on what to do? There's only two Vanguard funds available to me, the rest are CREF

Here's some of the lowest fee options available to me and their expense ratio:

Vanguard Total International Stock Index Fund Admiral      Equities   Mutual Fund / Other   VTIAX   0.11%
CREF Equity Index Account (R2) CREF Variable Annuity / Class R2   QCEQPX   0.30%
Vanguard Dividend Growth Fund Investor      Equities   Mutual Fund / Inv   VDIGX   0.30%
CREF Inflation-Linked Bond Account (R2) Fixed Income   CREF Variable Annuity / Class R2   QCILPX   0.31%      
CREF Growth Account (R2) Equities   CREF Variable Annuity / Class R2   QCGRPX   0.32%      
CREF Social Choice Account (R2) Multi-Asset   CREF Variable Annuity / Class R2   QCSCPX   0.33%   
CREF Stock Account (R2) Equities   CREF Variable Annuity / Class R2   QCSTPX   0.37%   
CREF Global Equities Account (R2) CREF Variable Annuity / Class R2   QCGLPX   0.40%   

By the way, they currently have me in a CREF Lifecycle fund with a .8% ratio!

This is not bad at all. Use it for your international stock allocation and put your other allocations elsewhere.

terran

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Re: CREF 401K options
« Reply #2 on: May 12, 2018, 07:25:33 AM »
Vanguard Total International Stock Index Fund Admiral      Equities   Mutual Fund / Other   VTIAX   0.11%

This is the fund you should be investing in for the international part of your asset allocation as a retail investor anyway. The only way you could do better in your 401(k) would be if you had a large employer with billions of dollars in its 401(k), then you might get access to the institutional class of this fund, but even then the expense ratio only goes down to 0.09%. I would invest as much of your 401(k) as you can in this and even out your asset allocation using your other accounts.

As electriceagle said, the rest really aren't that bad either. I would max out an IRA and HSA (if you have it) first, but after that I would put as much as I could in this 401(k). I'd probably even prioritize this 401(k) over a Roth IRA if you aren't eligible for a traditional IRA.

CREF Equity Index Account (R2) CREF Variable Annuity / Class R2   QCEQPX   0.30%   

If you need to invest some of your 401(k) in domestic equities to reach your desired asset allocation, use this. It's pretty similar to the usually recommended vanguard VTSAX with a worse (but not totally terrible) expense ratio. See https://www.tiaa.org/public/pdf/ffs/194408241.pdf

rokel

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Re: CREF 401K options
« Reply #3 on: May 13, 2018, 08:21:10 PM »
Thanks so much for your advice!