Author Topic: 401k allocation help  (Read 1710 times)

realsquirrels

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401k allocation help
« on: January 26, 2017, 06:37:23 PM »
Hello everyone! I'm new to this community but have been reading like crazy of late to get caught up. My company offers a 401k with 4% match which I have been doing for 8 years. They finally recently added 2 Vanguard choices that I immediately added but unfortunately not any of their index funds. Now they have finally just added an index fund which has an even better expense rate than the Vanguard options. I am about to reallocate everything and would just like a some suggestions before pulling the trigger. I'm still pretty ignorant with this stuff and have been fiddling with all sorts of bad options for years. I'm excited to finally have a few good choices and I'm ready to set it and forget it.

I'm leaning towards something like 50% of the S&P 500 index, 30% VWENX, 20% VEIRX. Considering VWENX contains 1/3 bonds, having 30% essentially gives me 10% of overall holdings in bonds without using one of the bond funds with much higher fees. Is there much point to having VEIRX when the index fund has lower fees? Any of these other options worth considering? Any feedback is appreciated. I'm 32 so I'll want a pretty aggressive portfolio.

So here are all the options with expense ratios:

WF/BlackRock S&P 500 Index CIT N5
0.089%

Vanguard Equity Income Adm
VEIRX    0.17%

Vanguard Wellington Admr
VWENX 0.18%

American Century Real Estate Inst
REAIX   0.94%

Ivy International Core Equity R6
IINCX   0.83%

JHancock Disciplined Value Mid Cap I
JVMIX      0.86%

JPMorgan US Small Company L
JUSSX     0.91%

PIMCO Real Return/Institutional
PRRIX 0.58%

T. Rowe Price Blue Chip Growth
TRBCX   0.71%

AMG Managers Fairpointe Mid Cap Fund I
ABMIX    0.87%
 
Dodge & Cox Income
DODIX    0.43%

Federated Total Return Govt Bond Inst
FTRGX 0.49%
 
HARTFORD MIDCAP Y
HMDYX   0.76%

Oakmark I
OAKMX 0.93%

Oppenheimer International Growth I
OIGIX   0.70%

T. Rowe Price Retirement 2030
TRRCX   0.72%/

T. Rowe Price Retirement 2040
TRRDX 0.76%
 
 

Thanks!

MustacheAndaHalf

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Re: 401k allocation help
« Reply #1 on: January 26, 2017, 08:03:59 PM »
First, thank you for listing fund expenses!  You're already more than halfway there.  By placing primary importance on how much funds cost you each year, you're very likely to do well.

I think your math is reasonably clever - picking an income fund with 30% bonds, and making things work out to 10% bonds overall.  Your choices are probably fine.  I'd personally favor the S&P 500 fund heavily because it's not actively managed (I believe Vanguard Windsor is an actively managed fund - you should double check).

NoStacheOhio

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Re: 401k allocation help
« Reply #2 on: January 27, 2017, 07:13:09 AM »
Is this your only investment money?

If so, then your proposed allocation is pretty reasonable, but you might consider only using the 500 and Wellington funds. There's going to be a lot of overlap between the 500 fund and VEIRX.

If you hold investments outside of your 401k, then look at what funds you have access to, and allocate across accounts. For example, if you have an IRA with access to a good bond index, reduce or eliminate bonds in your 401k.

realsquirrels

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Re: 401k allocation help
« Reply #3 on: January 27, 2017, 09:56:46 AM »
Is this your only investment money?

If so, then your proposed allocation is pretty reasonable, but you might consider only using the 500 and Wellington funds. There's going to be a lot of overlap between the 500 fund and VEIRX.

If you hold investments outside of your 401k, then look at what funds you have access to, and allocate across accounts. For example, if you have an IRA with access to a good bond index, reduce or eliminate bonds in your 401k.

It is my only investment money as of this writing. However, I have funds to start investing elsewhere as soon as I decide exactly where that elsewhere is going to be. But, it will only be about 10% of the total amount in the 401k to start with.

NoStacheOhio

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Re: 401k allocation help
« Reply #4 on: January 27, 2017, 11:19:56 AM »
Is this your only investment money?

If so, then your proposed allocation is pretty reasonable, but you might consider only using the 500 and Wellington funds. There's going to be a lot of overlap between the 500 fund and VEIRX.

If you hold investments outside of your 401k, then look at what funds you have access to, and allocate across accounts. For example, if you have an IRA with access to a good bond index, reduce or eliminate bonds in your 401k.

It is my only investment money as of this writing. However, I have funds to start investing elsewhere as soon as I decide exactly where that elsewhere is going to be. But, it will only be about 10% of the total amount in the 401k to start with.

Well if you want a 10% bond allocation, then holding it in a Vanguard/Fidelity/Schwab IRA isn't a bad idea.