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Learning, Sharing, and Teaching => Investor Alley => Topic started by: MoneyGoal on March 06, 2019, 12:02:58 PM

Title: Help with 401k
Post by: MoneyGoal on March 06, 2019, 12:02:58 PM
Hi,

Currently i invest everything in target fund where the gross expense ratio is about 0.41%.

Are there better options? Attached is the screenshot with the gross expense ratio. I am hoping to have VSTAX, but it is not available.

Thanks.

Title: Re: Help with 401k
Post by: FIRE@50 on March 06, 2019, 12:06:37 PM
VINIX = S&P 500
Title: Re: Help with 401k
Post by: nereo on March 06, 2019, 01:03:29 PM
It depends on what you want to invest IN. A target fund is a perfectly fine investment, and while the expense ratio is high compared to Vanguard, 0.41% is still reasonable.

A cheaper alternative would be to hold VBTIX (total bond fund) in conjunction with VINIX (sp500) in whatever ratio makes sense for you (e.g. 80/20 VINIX to VBTIX is reasonable in the accumulation phase).

Title: Re: Help with 401k
Post by: MoneyGoal on March 06, 2019, 02:13:45 PM
Thanks. For 401k contribution, there are options


What is base pay vs. variable pay?  And what is "After Tax"?
Thanks.
Title: Re: Help with 401k
Post by: MDM on March 07, 2019, 07:58:24 PM
Quote from: MoneyGoal on March 06, 2019, 12:02:58 PM
I am hoping to have VSTAX, but it is not available.
You could do 82% VINIX and 18% VIEIX, per Approximating total stock market - Bogleheads (https://www.bogleheads.org/wiki/Approximating_total_stock_market).

Quote from: MoneyGoal on March 06, 2019, 02:13:45 PM
What is base pay vs. variable pay?  And what is "After Tax"?
Base pay is the minimum you get each paycheck.  Variable pay is what you might get, depending on various things, e.g., overtime, bonuses, etc.

See After-tax 401(k) - Bogleheads (https://www.bogleheads.org/wiki/After-tax_401(k)) for more on that.
Title: Re: Help with 401k
Post by: MustacheAndaHalf on March 07, 2019, 08:17:37 PM
Just as an example without small caps, you might go with:

60% VINIX (S&P 500, 0.035%)
30% VTSNX (int'l, 0.08%)
10% VBTIX (bond, 0.04%)

That gives you an expense ratio of (.6 x VINIX + .3 x VTSNX + .1 x VBTIX) = 0.049%
Slightly better is splitting U.S. into S&P 500 and mid/small cap by replacing about 1/5th of VINIX with VIEIX (mid/small cap).