I've been reading as extensively as I can in this forum, bogleheads, and a couple of others, to determine what I should do with my company's not-fantastic Fidelity 401(k) options.
Here's my situation:
1) I've just started getting serious about getting out of debt and getting ready to retire; I've been on these boards (and other similar ones!) about a month. I'm on the expense-reduction train already, and I've read enough to know where I can and should cut down, I think. :)
2) Because my choices are so limited, I'm contributing to my 401(k) only up to my employer match. Starting now I'll be maxing my Roth IRA at Vanguard each year (including 2012), and my choices will be far clearer there.
3) I'm paying off a new car loan prior to selling the car; that loan is at a high interest rate, so I'm planning to pay it off entirely by the end of August. After that, it's just me, the bike, and maybe zip car.
4) I've got about 60K in student loan debt to pay off, across two different loans (6K and 54k), both of which are at around 4.25% interest. Both are currently in forbearance until August. Once the car is paid off and sold, I'll use part of that money to knock out the smaller loan completely and the rest will go to my 2013 Roth.
While I'm tackling everything else, I want to put my 401(k) on autopilot, but my choices seem to be pretty uninspiring. I could take one of the target funds - it would be the easiest for me to manage - but they're all in the .7 ER range, have low ratings, and haven't performed as well as the S&P index option has. On the other hand, the expense ratios of the four choices below add up to 1.7% - gah.
Right now I'm considering:
1. A basic S&P index fund, ER .21 (~60%)
2. A basic international equities index, ER .5 (~25%)
3. A US Bond fund, ER .51 (~7.5%)
4. An inflation-adjusted bond fund, ER .48 (7.5%)
I'm not happy with the expense ratios of the last three, but they're the lowest-ER options, and I don't have a lot of diversification options available to me. So maybe what I should be thinking about instead is just putting everything in the 401(k) into the S&P index, and deal with diversification issues through the Vanguard Roth?
I'd appreciate any thoughts - happy to add information if there are questions.