Author Topic: Wife's 401k - help with hesitation  (Read 1655 times)


  • Stubble
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  • Location: West Michigan
Wife's 401k - help with hesitation
« on: March 10, 2015, 02:56:07 PM »
So in the last few months since discovering MMM, there's been quite a few changes going on in our life.  Good changes!  Many inspired by the blog and the forum.
  • read every article on MMM
  • read several investing books
  • paid off the mortgage in December
  • completely debt free
  • Switched my IRA from American Funds to VTSAX
  • Maxed out 2014 Roths for me and the Mrs VTSMX
We're in our mid 40's, and plan to stash as much as we can now that the debt is gone.  Ideally, we'd like to FIRE in 10 years.  Through the years we've always put enough into her 401k to get the match.  Our income/expenses should allow us to fill her 401k and our two IRAs (no 401k for me) every year.  We've never invested so much money, but wow is it exciting to be able to do this going forward. 

My dilemma is my wife's 401k allocations and the mutual funds in there (see photo).  It's actually done pretty well considering the active management and all.  So I got into her account online last night and saw that they have Vanguard index funds available!  I know I should transfer to these funds, but I'm having difficulty in my brain.  This 401k account is over 200k, and is half of our net worth.

I could use a good face punching.  "Snap out of it, son, sell that shit."

Also, if anyone has any allocation/fund recommendations, I'd love to hear that.


  • Senior Mustachian
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Re: Wife's 401k - help with hesitation
« Reply #1 on: March 10, 2015, 03:13:27 PM »
Our income/expenses should allow us to fill her 401k and our two IRAs....
I know I should transfer to these [Vanguard index] funds....
Great job on all the things you have done.  And you are exactly right on the two "should"s listed above - do 'em!

Didn't see which index funds are available...?


  • Stubble
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  • Posts: 222
Re: Wife's 401k - help with hesitation
« Reply #2 on: March 10, 2015, 03:14:52 PM »
Definitely shift to less expensive funds.

What's happening here is your company is pushing the cost of administering the plan on to the employees. You can see this in the Expense ratio of the Money Market Fund. It has an expense ratio of .18, still above average for a MM fund. This 401k plan charges .49% on a MM fund which is inexcusable.

Pretty crappy thing to do IMO. Interestingly, the Fidelity Puritan plan doesn't seem to have a buffer in this manner. I did not investigate all of the funds, but the highest ER i pay is ~16bps on small cap index.

I see index funds, I don't see a vanguard index fund. My Total market fund is 5 bps to give you a comparison. There's no excuse for a S&P index to have an expense ratio over 10x this high since its only 500 stocks versus 4,000.

Given the bad options, I'd probably just throw everything into Fidelity P. It's roughly 65/35. Or throw everything into the bad S&P500 index and get your bond allocation in other accounts.

If they have vanguard funds, pick your allocation and do it. Set your contributions and don't log in for another year.

Snap out of it son (you're 2x my age), sell that shit.