background: When I started contributing to a 457b I put all contributions into a Vanguard target fund (VITFX) with an expense ratio of 0.10%. It was only after learning about MMM that I started thinking about ER. I quickly I moved my 457b money from VITFX to VIIIX, which has an expense ratio of 0.02%. I also have 403b and a post-tax Vanguard accounts, so I get my desired stock/bond across all of these.
Recently, the 457b's fees went up, and this got me wondering about "rolling" the plan's fees into VIIIX's expense ratio as an easier metric for the overall expense of this investment.
These are the fees:
Balance | Monthly/Annual Fee |
$1 - $5,000 | $0 / $0 |
$5,001 - $25,000 | $1 / $12 |
$25,001 - $50,000 | $2.50 / $30 |
$50,001 - $100,000 | $5 / $60 |
$100,001 - $150,000 | $7 / $84 |
$150,001 - $250,000 | $10 / $120 |
over $250,000 | $15 / $180 |
Say I have $35,000 in this account. I could do this on an annual basis to get the my 457b's expense ratio.
($30 / $35,000) x 100 = 0.086%
I'd add that to VIIIX's 0.02% to get an overall 457b ER of 0.106%
Obviously, this would get more complicated if I had other investments in this account, but still easily trackable with a spreadsheet.
Does this make sense? Is there a more practical way to approach this? Finally, am I missing something (i.e. am I weighting things in the wrong directions and my math is off by orders of magnitude)?