I’m ready for a new allocation/future strategy in my 401(k) with simple, low expense choices. No more trying to beat the market average. But I’m reluctant to put too much in just a S&P 500 index fund.
I think the S&P will be your best place to put the lion's share of the funds. I think it's worth noting the expense ratios you were paying are higher than all the other expense ratios in your plan, except small cap which are almost always higher. First thing would be to eliminate the Lifetime funds since you have better options.
Questions:
1) How long until you plan to need any of this money? When do you envision retiring?
2) Are you currently maxing out your contributions at $17,500? If not, that should be your first step unless you like taking the slow road. Read this if you haven't already:
http://www.madfientist.com/retire-even-earlier/ Without knowing your timeline and knowing nothing about your company, and simply using your age as my guide, I would recommend the following:
Large U.S. EquityLargeCap S&P 500 Sep - .06% exp - 50%
Small/Mid U.S. EquityMidCap Sep - .45% exp - 15%
SmallCap S&P 600 Sep - .06% exp - 15%
International EquityDiversified Int’l Sep - .69% exp - 5%
Int’l Emg Mkt Sep - .69% exp - 5%
Company StockESOP Company Stock - 0% exp - 10%
You mentioned you wanted diversification. The only thing that's not diversified in this recommendation is your ESOP. Since you know the company well and it has no expense, I think you should invest some funds there, but limit your exposure to 10%. Outside of that, this would give you large, mid, small, and international stocks. Each one of these funds is invested in hundreds of companies, so there's your diversification.
I would not put anything in bonds unless you are extremely risk averse. As long as you know going in you will lose value at times, and you need to hold onto the stock funds, you will be fine. Once you are a few years away from actually needing the money, buy some bonds to smooth out the ride.
Last note - I'm aggressive when it comes to investing, and there are many smarter investors on this forum than me, so take it all with a grain of salt.