401K Investment Choice

[MichelleT]

Hello all,

My husband's company just let us know that we can sign up for 401K with them. However, the employer does not offer any matching at this point. I just wonder if you could provide some feedback on the investment choice provided below. Is it still good signing up for 401K with them without any matching?

Investment Choice:

Short Bonds/Stable/MMkt - Transamerica Stable Value Advantage Account J4
Interm./Long-Term Bond - AEGON Bond Ret Acct 10
Interm./Long-Term Bond - Loomis Sayles Bond Ret Acct 70
Interm./Long-Term Bond - SSgA U.S. Bond Index Ret Acct 99
Interm./Long-Term Bond - Loomis Sayles Investment Grade Bond Ret Acct F7
Interm./Long-Term Bond - PIMCO Total Return Ret Acct U8
Interm./Long-Term Bond - PIMCO Real Return Ret Acct Z9
Aggressive Bonds -           Transamerica Partners High Yield Bond Ret Acct 68
Large-Cap Stocks -           American Funds Washington Mutual Investors Inv Acct 75
Large-Cap Stocks -           BlackRock Equity Dividend Inv Acct K7
Large-Cap Stocks -           Goldman Sachs Large Cap Value Insights Ret Acct F2
Large-Cap Stocks -           WMC Core Equity Ret Acct 7
Large-Cap Stocks -           Neuberger Berman Large Cap Value Inv Acct B3
Large-Cap Stocks -           Vanguard Total Stock Market Index Ret Acct H9
Large-Cap Stocks -           Morgan Stanley Growth Ret Acct 4
Large-Cap Stocks -           WMC Quality Growth Equity Ret Acct 5
Large-Cap Stocks -           American Funds Growth Fund of America Inv Acct 82
Large-Cap Stocks -           Janus Capital Appreciation Ret Acct C5
Large-Cap Stocks -           Janus Ret Acct C7
Small/Mid-Cap Stocks -     Columbia Mid Cap Value Inv Acct 52
Small/Mid-Cap Stocks -     Goldman Sachs Mid Cap Value Ret Acct F1 %
Small/Mid-Cap Stocks -     SSgA S&P Mid Cap Index Ret Acct 98 %
Small/Mid-Cap Stocks -     Fidelity Advisor Leveraged Company Stock Inv Acct E3
Small/Mid-Cap Stocks -     Morgan Stanley Growth Opportunities Ret Acct 3
Small/Mid-Cap Stocks -     Goldman Sachs Mid-Cap Opportunities Ret Acct C4
Small/Mid-Cap Stocks -     Alger SMid Cap Growth Ret Acct J8
Small/Mid-Cap Stocks -     Vanguard Small-Cap Value Index Ret Acct H3
Small/Mid-Cap Stocks -     Fidelity Advisor Small Cap Inv Acct 46
Small/Mid-Cap Stocks -     SSgA Russell Small Cap Index Ret Acct 95
Small/Mid-Cap Stocks -     Nuveen Small Cap Value Ret Acct E8
Small/Mid-Cap Stocks -     Vanguard Small-Cap Index Ret Acct H2
Small/Mid-Cap Stocks -     Vanguard Small-Cap Growth Index Ret Acct H1
International Stocks -       Oppenheimer Global Ret Acct C8
International Stocks -       American Funds EuroPacific Growth Ret Acct D
International Stocks -       American Funds SMALLCAP World Ret Acct E0
International Stocks -       Janus Overseas Ret Acct F4
International Stocks -       Vanguard International Value Ret Acct G8
Multi-Asset/Other -           Prudential Jennison Natural Resources Inv Acct F5
Multi-Asset/Other -           Vanguard European Stock Index Ret Acct G7
Multi-Asset/Other -           Vanguard Pacific Stock Index Ret Acct G9
Multi-Asset/Other -           Wells Fargo Advantage Precious Metals Inv Acct J1
Multi-Asset/Other -           American Funds Balanced Inv Acct 93
Multi-Asset/Other -           Vanguard Target Retirement Income Ret Acct B6
Multi-Asset/Other -           Vanguard Target Retirement 2015 Ret Acct B7
Multi-Asset/Other -           Vanguard Target Retirement 2025 Ret Acct B8
Multi-Asset/Other -           Vanguard Target Retirement 2035 Ret Acct B9
Multi-Asset/Other -           Vanguard Target Retirement 2045 Ret Acct C0
Multi-Asset/Other -           Vanguard Target Retirement 2010 Ret Acct H4
Multi-Asset/Other -           Vanguard Target Retirement 2020 Ret Acct H5
Multi-Asset/Other -           Vanguard Target Retirement 2030 Ret Acct H6
Multi-Asset/Other -           Vanguard Target Retirement 2040 Ret Acct H7
Multi-Asset/Other -           Vanguard Target Retirement 2050 Ret Acct H8
Multi-Asset/Other -           Vanguard Target Retirement 2055 Ret Acct IL
Multi-Asset/Other -           Transamerica Asset Allocation - Conservative Portfolio Ret Acct C9
Multi-Asset/Other -           Transamerica Asset Allocation - Moderate Portfolio Ret Acct D0
Multi-Asset/Other -           Transamerica Asset Allocation - Moderate Growth Portfolio Ret Acct D1
Multi-Asset/Other -           Transamerica Asset Allocation - Growth Portfolio Ret Acct D2
Multi-Asset/Other -           PIMCO All Asset Ret Acct RD

[caracarn]

Hello all,

My husband's company just let us know that we can sign up for 401K with them. However, the employer does not offer any matching at this point. I just wonder if you could provide some feedback on the investment choice provided below. Is it still good signing up for 401K with them without any matching?

Investment Choice:

Short Bonds/Stable/MMkt - Transamerica Stable Value Advantage Account J4
Interm./Long-Term Bond - AEGON Bond Ret Acct 10
Interm./Long-Term Bond - Loomis Sayles Bond Ret Acct 70
Interm./Long-Term Bond - SSgA U.S. Bond Index Ret Acct 99
Interm./Long-Term Bond - Loomis Sayles Investment Grade Bond Ret Acct F7
Interm./Long-Term Bond - PIMCO Total Return Ret Acct U8
Interm./Long-Term Bond - PIMCO Real Return Ret Acct Z9
Aggressive Bonds -           Transamerica Partners High Yield Bond Ret Acct 68
Large-Cap Stocks -           American Funds Washington Mutual Investors Inv Acct 75
Large-Cap Stocks -           BlackRock Equity Dividend Inv Acct K7
Large-Cap Stocks -           Goldman Sachs Large Cap Value Insights Ret Acct F2
Large-Cap Stocks -           WMC Core Equity Ret Acct 7
Large-Cap Stocks -           Neuberger Berman Large Cap Value Inv Acct B3
Large-Cap Stocks -           Vanguard Total Stock Market Index Ret Acct H9
Large-Cap Stocks -           Morgan Stanley Growth Ret Acct 4
Large-Cap Stocks -           WMC Quality Growth Equity Ret Acct 5
Large-Cap Stocks -           American Funds Growth Fund of America Inv Acct 82
Large-Cap Stocks -           Janus Capital Appreciation Ret Acct C5
Large-Cap Stocks -           Janus Ret Acct C7
Small/Mid-Cap Stocks -     Columbia Mid Cap Value Inv Acct 52
Small/Mid-Cap Stocks -     Goldman Sachs Mid Cap Value Ret Acct F1 %
Small/Mid-Cap Stocks -     SSgA S&P Mid Cap Index Ret Acct 98 %
Small/Mid-Cap Stocks -     Fidelity Advisor Leveraged Company Stock Inv Acct E3
Small/Mid-Cap Stocks -     Morgan Stanley Growth Opportunities Ret Acct 3
Small/Mid-Cap Stocks -     Goldman Sachs Mid-Cap Opportunities Ret Acct C4
Small/Mid-Cap Stocks -     Alger SMid Cap Growth Ret Acct J8
Small/Mid-Cap Stocks -     Vanguard Small-Cap Value Index Ret Acct H3
Small/Mid-Cap Stocks -     Fidelity Advisor Small Cap Inv Acct 46
Small/Mid-Cap Stocks -     SSgA Russell Small Cap Index Ret Acct 95
Small/Mid-Cap Stocks -     Nuveen Small Cap Value Ret Acct E8
Small/Mid-Cap Stocks -     Vanguard Small-Cap Index Ret Acct H2
Small/Mid-Cap Stocks -     Vanguard Small-Cap Growth Index Ret Acct H1
International Stocks -       Oppenheimer Global Ret Acct C8
International Stocks -       American Funds EuroPacific Growth Ret Acct D
International Stocks -       American Funds SMALLCAP World Ret Acct E0
International Stocks -       Janus Overseas Ret Acct F4
International Stocks -       Vanguard International Value Ret Acct G8
Multi-Asset/Other -           Prudential Jennison Natural Resources Inv Acct F5
Multi-Asset/Other -           Vanguard European Stock Index Ret Acct G7
Multi-Asset/Other -           Vanguard Pacific Stock Index Ret Acct G9
Multi-Asset/Other -           Wells Fargo Advantage Precious Metals Inv Acct J1
Multi-Asset/Other -           American Funds Balanced Inv Acct 93
Multi-Asset/Other -           Vanguard Target Retirement Income Ret Acct B6
Multi-Asset/Other -           Vanguard Target Retirement 2015 Ret Acct B7
Multi-Asset/Other -           Vanguard Target Retirement 2025 Ret Acct B8
Multi-Asset/Other -           Vanguard Target Retirement 2035 Ret Acct B9
Multi-Asset/Other -           Vanguard Target Retirement 2045 Ret Acct C0
Multi-Asset/Other -           Vanguard Target Retirement 2010 Ret Acct H4
Multi-Asset/Other -           Vanguard Target Retirement 2020 Ret Acct H5
Multi-Asset/Other -           Vanguard Target Retirement 2030 Ret Acct H6
Multi-Asset/Other -           Vanguard Target Retirement 2040 Ret Acct H7
Multi-Asset/Other -           Vanguard Target Retirement 2050 Ret Acct H8
Multi-Asset/Other -           Vanguard Target Retirement 2055 Ret Acct IL
Multi-Asset/Other -           Transamerica Asset Allocation - Conservative Portfolio Ret Acct C9
Multi-Asset/Other -           Transamerica Asset Allocation - Moderate Portfolio Ret Acct D0
Multi-Asset/Other -           Transamerica Asset Allocation - Moderate Growth Portfolio Ret Acct D1
Multi-Asset/Other -           Transamerica Asset Allocation - Growth Portfolio Ret Acct D2
Multi-Asset/Other -           PIMCO All Asset Ret Acct RD

Vanguard Total Stock Market Index is always a safe bet. 

You still get pre-tax dollars going in and therefore a tax savings, so it is a good idea to participate even without a match.

[MichelleT]

Hi Caracarn, thank you for replying. I am thinking about going with Vanguard too, but need to do more research on it.

[caracarn]

Hi Caracarn, thank you for replying. I am thinking about going with Vanguard too, but need to do more research on it.

Very low expense ratio and covers the whole market.  I do 100% of it in my 401k.  Makes for a very simple portfolio.  I have Vanguard Bond fund outside of my 401k in my IRA as I do not have the overhead feed of the 401k there and bond funds are a little more costly (0.02% more) and I can change the allocation whenever I need, where my current employer plan only lets me make changes to what I put in or where it goes quarterly.  We also have a 3-11% match so pretty happy.

[mikesinWV]

Those Vanguard Retirement account may be a good place to start.  You may pay a bit more for the convenience but I think it might be a good option if you aren't into investing and need something convenient and efficient.

[aceyou]

Vanguard Total Stock is 100% of my retirement holdings right now. 

- Lowest prices around at 0.04%
- I get to own about all of the publicly traded companies in the usa with one purchase.
- vanguard is an amazing company

[CoffeeR]

Vanguard Total Stock is 100% of my retirement holdings right now. 

- Lowest prices around at 0.04%
- I get to own about all of the publicly traded companies in the usa with one purchase.
- vanguard is an amazing company

Careful. I've seen "special" share classes of Vanguard Total Stock with expense ratios as high as .80%. I suspect the one listed above is such a "special" share class.

[Rosy]

Vanguard Total Stock is 100% of my retirement holdings right now. 

- Lowest prices around at 0.04%
- I get to own about all of the publicly traded companies in the usa with one purchase.
- vanguard is an amazing company

Careful. I've seen "special" share classes of Vanguard Total Stock with expense ratios as high as .80%. I suspect the one listed above is such a "special" share class.

Lucky for her, since she is still at the "looking into which funds to choose" stage - that's not a problem at all:)
If the OP does her homework like she mentioned - she will look at the expense ratio before she makes her decision. The information should be right on line.
Excellent point though as I discovered when I looked at Mr. R's choices in his 401K. One of the funds was I believe right at 2.05 - shucks, that expense ratio will certainly put a dent in the stash over time.

[RedmondStash]

If we had the Vanguard Total Stock Market Index Fund in our 401k, I'd be 100% in it. But yes, by all means, make sure you check the fund's fees in the actual 401k.

I only have maybe 2-3 Vanguard options in my 401k, so I ended up 100% in VIGAX instead. It's done well enough. I looked at expense ratios and 10-year performance for the various options, and the non-Vanguard ones were much worse than the Vanguard ones. You're lucky that you have a Total Stock Market Index Fund option; a lot of 401k's don't have any good low-cost index-fund options.

Bear in mind that your 401k does not have to be your only investment, and that VTSMX/VTSAX has diversification built right into it, as would any other total stock market index fund.

[caracarn]

Vanguard Total Stock is 100% of my retirement holdings right now. 

- Lowest prices around at 0.04%
- I get to own about all of the publicly traded companies in the usa with one purchase.
- vanguard is an amazing company

Careful. I've seen "special" share classes of Vanguard Total Stock with expense ratios as high as .80%. I suspect the one listed above is such a "special" share class.

If it is anything like my plan, they are not "special" classes, they just have the 401k administration fees on top of everything.  So in our case we have 0.04% for VTSAX, but there are 0.30% additional fees on there for the financial advisor the company has to set up the plan and then for the plan company (Voya) so my lowest ratio for anything is still VTSAX at 0.34%.  I'd imagine this is similar in any plan, but certainly as they are just picking they can research and figure it out.

[DarkandStormy]

@MichelleT - how old are you and your husband?  Or rather, how close to FIRE are you?  If you're just starting out, then yes, Vanguard Total Stock Market would be a very good choice.  You can compare the 5 and 10 year averages to the others, of course.  As someone mentioned, don't forget that you can also contribute to a Traditional or Roth IRA on your own and have even more options at your disposal.