401(k) allocation question

[frugalmaybe]

i was originally allocating 100% of my (current employer's) 401(k) to a t.rowe price target fund but the expense ratio is .75, so I am thinking of changing allocation like so (i'm in my early 40s)

Vanguard Institutional Index Fund Institutional Shares VINIX (42% er: .04)
Vanguard Total International Stock Index Fund Admiral Shares VTIAX (18% er: .12)
Vanguard Total Bond Market Index Fund Admiral Shares VBTLX (40% er: .06)

This was based on the 401(k) fund selection guide in the wiki. Does this seem like a reasonable strategy? I noticed there was a also a small/mid company vanguard index fund, and wasn't sure what the conventional wisdom was for that.
Thanks for any input

[TomTX]

It's a reasonable strategy, though too bond-heavy for me.

[seattlecyclone]

I noticed there was a also a small/mid company vanguard index fund, and wasn't sure what the conventional wisdom was for that.

If you have separate small-cap and mid-cap funds, buy the institutional index and the other two funds in an 8:1:1 ratio to approximate a total US stock market fund. If you have the "extended market" index, buy the Institutional Index and Extended Market index in a 4:1 ratio.

[frugalmaybe]

I noticed there was a also a small/mid company vanguard index fund, and wasn't sure what the conventional wisdom was for that.

If you have separate small-cap and mid-cap funds, buy the institutional index and the other two funds in an 8:1:1 ratio to approximate a total US stock market fund. If you have the "extended market" index, buy the Institutional Index and Extended Market index in a 4:1 ratio.

thanks... by the way, would you happen to know if i am incurring costs each time i change my contributions?

[PhysicianOnFIRE]

Definitely get out of that expensive TRP Target Date fund and into the low ER Vanguard funds of your choosing.

Do you have investments outside of your 401(k)? If so, choose your allocation and apply across all accounts. If all your money is in the 401(k) and you're happy with a relatively conservative allocation, what you've proposed sounds reasonable.

Best,
-PoF

[NorCal]

I agree on the changes.  Some will think the bond allocation is too high, others too low.  That's whatever you're comfortable with.

I don't see anything wrong with splitting the US domestic to include a small cap fund.  It could work out better or worse, and only time will tell.  I personally split my domestic stocks 50/50 between large cap & small cap, but that's a personal preference.

[frugalmaybe]

great replies! thanks