Author Topic: Need to optimize 401k funds  (Read 475 times)

Monoposto

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Need to optimize 401k funds
« on: June 02, 2019, 12:28:29 PM »
Hello! Long time lurker but first time poster.
Been reading MMM for a while now and have attempted to do my best at keeping my 401k fees as low as possible.

While I see some room for improvement, i.e. the bonds fund I have, the fees are fairly high. I would appreciate some input from the members here on the forum who have been doing this for much longer than i have.

I've attached some screen shots of all of the funds available. The ones i have money allocated to have the asterisk.

MDM

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Re: Need to optimize 401k funds
« Reply #1 on: June 03, 2019, 08:34:57 AM »
Sorry to see you have such poor choices.

Some reading for your consideration:
How to campaign for a better 401(k) plan
Tax-efficient fund placement

Depending on your overall asset allocation strategy, you might want only the S&P 500 in the 401k, bonds in IRAs, and international in taxable.

Monoposto

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Re: Need to optimize 401k funds
« Reply #2 on: June 04, 2019, 05:01:37 PM »
Sorry to see you have such poor choices.

Some reading for your consideration:
How to campaign for a better 401(k) plan
Tax-efficient fund placement

Depending on your overall asset allocation strategy, you might want only the S&P 500 in the 401k, bonds in IRAs, and international in taxable.

Thank you! Man no one seems to want to offer advice. I agree it seems pretty bleak when your employer has such poor offerings for their 401k.  I am going to do my best to try and persuade the company to change plans but I'm not holding my breath. I've tried in the past at different companies and they all laugh at me when i tell them how much their employees are potentially losing with the current admin.

I am getting ready to max my 401k and roth ira this next year and wanted to be sure I had the correct allocations.

So hypothetically speaking.  If I want to save 50,000/yr, 19k is going towards 401k, 6k towards my vanguard Roth IRA and the rest (25k) into taxable accounts.

Being that I'm 32, going on 33 in July, I wanted to be super aggressive with my savings and allocations. What % should be in index funds, bonds, and cash? Assuming I rebalance every year.

MDM

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Re: Need to optimize 401k funds
« Reply #3 on: June 04, 2019, 07:33:21 PM »
Being that I'm 32, going on 33 in July, I wanted to be super aggressive with my savings and allocations. What % should be in index funds, bonds, and cash? Assuming I rebalance every year.
There are no correct amounts that "should" be allocated, except in hindsight.

Different people would define "super aggressive" as anywhere from 75/25 to 100/0 stocks/bonds.  Cash might be "however much you want to keep in an emergency fund at ~2-2.5%/yr interest."

See Asset allocation - Bogleheads for more.

Enigma

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Re: Need to optimize 401k funds
« Reply #4 on: June 05, 2019, 12:05:42 PM »
I would focus everything in the S&P 500 option "Invesco Equally-Weighted S&P 500A" mostly because I do not like the fees of any of them and that is the best.  Also know the terms of the 401k account well.  (Account/Plan information).  Some allow you to roll out of the account at any time to any IRA. Others only allow you to roll out when you leave a company.  Some allow 'partial withdrawals' or 'hardship withdrawals'.

Monoposto

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Re: Need to optimize 401k funds
« Reply #5 on: June 09, 2019, 10:59:21 AM »
Thank you MDM and Enigma. I really appreciate it and you guys are helping reinforce what I've learned through reading.

I have changed my contribution allocations to 100% into the s&p fund.

Enigma I will go looking for that. What do you mean by roll my 401k into ira?  As in when I retire? Or am I allowed to roll my end of year 401k balance into an ira?

Enigma

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Re: Need to optimize 401k funds
« Reply #6 on: June 10, 2019, 09:38:48 AM »
Enigma I will go looking for that. What do you mean by roll my 401k into ira?  As in when I retire? Or am I allowed to roll my end of year 401k balance into an ira?
Every company 401k is different.  Some allow you to borrow against it (upto 50k & half of your 401k) others allow you to roll money out just as quickly as you roll money into them.  My current company's 401k only allows me to roll out when I quit.  Then again they are in the middle of a merger now so I do expect changes in the 401k.