Newbie investor here and I would appreciate some help: I want to change my Traditional 401K and Roth IRA investments out of target date funds to individual funds with better expense ratios.
I apologize for what I’m sure is a very basic question, but are there any consequences/things I need to consider when doing this? I’ve never exchanged investments within my 401K nor my Roth IRA, so I don’t know if it’s just as simple as logging into my account, clicking on the “exchange” button and selecting the new funds…or are there any fees, tax consequences, etc. that I should be aware of when exchanging my investments?
If it matters, for my 401K, I'm trying to switch out of American Funds 2040 Target Date Retirement (ER of 1.18%) to some lower cost Vanguard options that I have available (VFIAX and VBTLX) for a slightly better ER of 0.85%. My Roth IRA is with Vanguard, and I'd be switching out of Vanguard Target Retirement 2040 to VTSAX.
Thanks!