The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: xpauliber on July 13, 2018, 07:20:13 AM
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My employer matches up to 4% on my 401k but I'm stuck having to invest through American Funds. I wish I had access to VTSAX or something similar but this is what I have to work with.
American Funds Growth Portfolio (RGPCX) shows a 13.68% return over 10 years which seems awesome but it has a 1.05% annual expense ratio.
I'm fine going 100% stocks at this point. I'm wondering if I should go 100% into just one fund (RGPCX?) or spread my investments around. Here's my options for growth funds with 10-year returns and annual expense ratios:
RGPCX - 13.68% - 1.05%
RGACX - 9.69% - 0.98%
RNGCX - 11.56% - 1.11%
RNPCX - 8.02% - 1.09%
RNWCX - 3.23% - 1.30%
RAICX - 10.44% - 0.98%
Thoughts? Thanks!
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Just looking at the funds, I'd say:
Don't be afraid of the international one (RNWCX). It's returns are lower lately because the US dollar has appreciated a lot in the last four years. You're going to want to have money in that when the pendulum swings back the other way. You'll want at least 25% of your 401K in that.
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Small or large employer? Where are you at on the totem pole? I would complain to HR and or the 401k plan committee about the underlying cost of their investment choices. 401k plan trustees / employers have been sued for such practices and it is not outside of the realm of possibility that a group of employees could create momentum to enact positive change in this situation
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Small or large employer? Where are you at on the totem pole? I would complain to HR and or the 401k plan committee about the underlying cost of their investment choices. 401k plan trustees / employers have been sued for such practices and it is not outside of the realm of possibility that a group of employees could create momentum to enact positive change in this situation
Small 501c(6) non-profit.
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Who in the company “runs” the plan? I would pursue this in a friendly manner, try to figure out how they ended up in this position, volunteer to serve on plan committee if there is one, try to get a sense if anyone else is of a like mind with you. Those fees erode returns of everyone from the bottom to top. If whoever runs the plan does not object you may even be able to engage some third parties to offer an alternative, review overall plan costs, someone like Employee Fiduciary. You could end up not only saving participants money but also the company. Take ownership of this and try to make a positive change.
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Who in the company “runs” the plan? I would pursue this in a friendly manner, try to figure out how they ended up in this position, volunteer to serve on plan committee if there is one, try to get a sense if anyone else is of a like mind with you. Those fees erode returns of everyone from the bottom to top. If whoever runs the plan does not object you may even be able to engage some third parties to offer an alternative, review overall plan costs, someone like Employee Fiduciary. You could end up not only saving participants money but also the company. Take ownership of this and try to make a positive change.
Thank you for the info & encouragement. We're a 4-person organization and the person that does HR/Accounting/payroll "runs" the plan but I know she just follows the lead of our local bank's wealth & asset management department. That department is the one that got us into American Funds shortly after I was hired here (8 years ago). At that time, they switched to American Funds because the bank felt the prior plan we were in was charging too high of fees! Makes me cringe just thinking of what I could be in right now.
Anyways, I'd like to see the plan run through Vanguard but I'm not sure I can make the case why.
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This is all good news. If you can get access to plan info in terms of how much it costs to run the plan, third party admin costs, total plan assets, then you could get quotes from other admins like Employee Fiduciary, Guideline, there are others that are low cost, offer a good menu of low cost index funds. Depends on complexity of your plan. Are there people at the top who are highly compensated and might object because they’re golf buddies with the local bank president. You need to anticipate the obstacles to change and try to figure out a way around