Changing companies, changing investment options

[Ashyukun]

The company I work for was recently sold by the large multinational corporation we were a division of and bought by yet another large multinational corporation. Not a whole lot of changes that directly impact me yet (nor am I expecting too many since we'll remain a largely autonomous entity)- but one that does directly impact me is that we have to transition from the old company's investment options to the new one's. Which is kind of good because I've been patently lazy about it and really haven't looked at or changed my investments for quite a while.

For better or worse, the new company has a lot more options (though less actual funds...) than the old one. For one, you can go off the reservation so to speak and invest in a 'Self-Directed Brokerage Account' where you set up your own custom plan through TD Ameritrade. Of course, there are commissions & transaction fees for this.

One thing that the new company has that is particularly interesting are Target Date Funds that you can invest in similar to Vanguard's Target Retirement funds (though they don't seem to do as well- the company's 2040 one has a 2.8% return since inception vs. Vanguard's 2040 return since inception of 5.6%). The expenses are also apparently twice Vanguard's- VFORX is .18% vs the company's .32%. This is what the default is if I don't make any specific designations.

All of the paperwork for this is making my head spin. -_-

[matchewed]

Write an Investment Policy Statement, keep it simple for now so you don't get overwhelmed. Find the funds which can fulfill that plan which has the lowest fees.

[Frugancial Advisor]

First off, be weary of 'since inception returns' as these will vary widely - it's more accurate to compare returns based on the same time-frame. For example, a fund that was started in 2009 is going to have a much higher 'since inception return' than a fund launched in 2007. A more accurate comparison would be that of their 6-month, 1 year, and 3 year returns versus that of their benchmark indices.

Secondly, you're in a good position! The ability to use a self-directed brokerage account means free reign on which investments you'd like to use (including Vanguard Retirement Funds). But, even the option of a 0.32% MER target retirement fund as the alternative is excellent.

Feel free to post more information and ask any specific questions you might have regarding the individual investment options. Either way, it seems on the surface that you're in a good position regardless.