Author Topic: Deferred Comp Changes  (Read 3210 times)

Truckman

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Deferred Comp Changes
« on: May 01, 2015, 08:28:07 AM »
Our Deferred Comp has changed choices from so-so to worse IMO.  I was 100% in Vanguard Institutional Index I  because it was the only Vanguard option, and the only one with the incredibly low expense ratio (0.04%).  I have automatically been changed over to SSgA Target Retirement 2040 SL Ser III with an expense ratio of 0.42%!!

Below is the list of my current options.  The two Vanguard options seem pretty crappy, too, with ER's of 0.44% and 0.27%.   At this point, do I pull my $$ from my Deferred Comp plan and go out on my own?  Right now I'm pretty under-funded in it, I've only been making max contributions for a little over a year now.... (approx $31K balance).  Is the tax advantage worth the extra money put out for the higher expense ratios?

Great-West SecureFoundation Balanced G      MXSBX
SSgA Target Retirement Inc SL Series III         
SSgA Target Retirement 2020 SL Ser III         
SSgA Target Retirement 2030 SL Ser III      
SSgA Target Retirement 2040 SL Ser III         
SSgA Target Retirement 2050 SL Ser III         
Harbor International Fund - Admin      HRINX
JPMorgan Emerging Mkts Eq Sel      JEMSX
AB Discovery Growth Adv   Mid Cap      CHCYX
Vanguard Selected Value Inv   Mid Cap      VASVX
LSV Value Equity Fund   Large Cap      LSVEX
T. Rowe Price Instl Large Cap Growth   Large Cap      TRLGX
Vanguard FTSE Social Index Inv   Large Cap      VFTSX
Dodge & Cox Income Fund   Bond      DODIX
Legg Mason BW International Opps Bd FI   Bond      LWOFX
City of Baltimore Stable Value Fund   Fixed   

MDM

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Re: Deferred Comp Changes
« Reply #1 on: May 01, 2015, 08:38:18 AM »
Below is the list of my current options.  The two Vanguard options seem pretty crappy, too, with ER's of 0.44% and 0.27%.   At this point, do I pull my $$ from my Deferred Comp plan and go out on my own?  Right now I'm pretty under-funded in it, I've only been making max contributions for a little over a year now.... (approx $31K balance). 

Is the tax advantage worth the extra money put out for the higher expense ratios?
Probably.

See http://forum.mrmoneymustache.com/investor-alley/american-funds-401k-1-5-expense/msg645461/#msg645461 for similar discussion.

Truckman

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Re: Deferred Comp Changes
« Reply #2 on: May 01, 2015, 08:55:37 AM »
Thanks for the link!  Good read.

Any thoughts on which fund would be best?  Just go with the lowest fee VG fund? 

MDM

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Re: Deferred Comp Changes
« Reply #3 on: May 01, 2015, 09:01:20 AM »
Thanks for the link!  Good read.

Any thoughts on which fund would be best?  Just go with the lowest fee VG fund?
You're welcome.

Regarding fund choices, if I could just find my hindsight glasses....  Seriously, "the lowest fee...fund"s that match your desired asset allocation would be a reasonable way to go.

mikesinWV

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Re: Deferred Comp Changes
« Reply #4 on: May 01, 2015, 09:03:21 AM »
Honestly, I don't think your choice are all that terrible and fees at .44% aren't awful.  I've seen some >1%. 

Before just putting everything into a Vanguard Fund make sure you are looking at the returns too.  I think that T Rowe Price was a pretty good fund but check the portfolio manager--for some reason I think the one that led it for years has retired. 

I think you will have a hard time trying to find a better tax-deferred option on your own.

dandarc

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Re: Deferred Comp Changes
« Reply #5 on: May 01, 2015, 09:10:16 AM »
So long as you're OK with that fund - socially responsible investing index fund.  Not particularly diversified, has underperformed S&P 500 a bit. 

It is not quite as diversified as you might think, due to excluding  - Over 5% Apple stock (granted VTSAX is a bit over 3% Apple).  Seems that the criteria exclude any Oil companies - I'm sure that's not the only thing, but no Exxon-Mobile, and no Cheveron and such jumps off the page.

Truckman

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Re: Deferred Comp Changes
« Reply #6 on: May 01, 2015, 09:26:41 AM »
Thanks everyone! 

I'm not particularly interested in socially-responsible investing necessarily.  I'm just looking for the best spot to park my money.

Maybe split between several funds then? Try to replicate an index fund with my choices?

Hindsight glasses....I like that one!  LOL

ShoulderThingThatGoesUp

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Re: Deferred Comp Changes
« Reply #7 on: May 01, 2015, 11:52:55 AM »
City of Baltimore Stable Value Fund   Fixed

Why??? Is this required? I would be very nervous to have my savings tied to politics this directly.

Realized that was your list of options, not what you had stuff in. Never mind...

Truckman

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Re: Deferred Comp Changes
« Reply #8 on: May 01, 2015, 12:58:16 PM »
City of Baltimore Stable Value Fund   Fixed

Why??? Is this required? I would be very nervous to have my savings tied to politics this directly.

Realized that was your list of options, not what you had stuff in. Never mind...

LOL....  I completely agree though...