Do investments in S&P 500 really double every ~7 years?

[J.P. MoreGains]

A friend recently told me that investments in the S&P 500 typically will double every 7 or so years.

This seems too good to be true... is this really the case?

So investing in a low fee S&P 500 index fund has a lot of potential benefit.

I'm new to this so could someone correct me if I'm wrong:

Investing in an S&P 500 Index Fund is like investing in a statistical representation of the 500 largest US companies. As these companies grow your investment grows and your investment is spread across those 500 companies in proportion to their value.

VTSAX is a favorite I hear a lot about... does that also have the same or nearly the same doubling potential?

VTSAX is similar to an S&P 500 index fund but the difference is it is a statistical representation of the US Economy and diversifies more by including investments in smaller companies not represented in the S&P 500. It also represents investing proportionally in different sectors of the US economy.

This seems like a middle school book report but I guess that is my level.

Right now I'm 44 and should be at 200k by July... but I'm mostly invested in "Target 2045" funds.

I've been thinking since my expenses are low and since I'm a bit of a minimalist to move more toward S&P 500 / VTSAX plus an international index fund.

It's kind of hard to believe that my 200k could be 400k in 7 years! I really want to hustle over the next few years and let it grow.

Any feedback is welcome since my focus is more on the earn it side than the know all the details about investing side (which is why I'm in the Vanguard target 2045 fund)

[Paper Chaser]

Yeah, The Rule of 72 approximates this based on historical returns. If you're actively making contributions and/or you get better than average returns it can double in less time.

[MustacheAndaHalf]

In practice it varies - there are 14 year periods without doubling, and then there's 2019-2021 where the market doubled in 3 years.  But on average, stocks earned 10.55%/year since 1972, which works out to doubling every 7 years.

Before you get too optimistic, ask yourself if you like it when people steal your money.  When you have $5,000 and someone robs you of $2,000... because that's what the stock market feels like.  It feels like a robbery, with the money just gone.  To brace for that, I think investors should look at data on past crashes and recoveries.

[dandarc]

Remember to reinvest dividends if you want to approach that performance. And of course doubling in 7 years is average / typical, but no guarantees at all and there's a lot of variation.

In a 2045 fund, you're probably fairly close to your proposed portfolio anyway - should be about 85% stocks to 15% bonds, but that allocation will shift towards more bonds as time goes on. Maybe that would be expected to double in 10 years instead of 7. Bonds smooth the ride at the price of a lower expected return (see @MustacheAndaHalf for why you might want to do that).

[vand]

Nominally it has done so over long timeframes. In real terms takes more like 10-11 years.

[J.P. MoreGains]

Thanks everyone for the replies... much appreciated.

This kind of confirms what I was thinking and is good news.

So nothing is guaranteed of course... but historically speaking that has been the performance. Which is good news to me.

I am reinvesting dividends and I'm putting over 7k of new money in each month as long as my second job holds out for a few more months.

Sounds like maybe the 2045 funds aren't a bad play either.

I'm really glad I found MMM I wasn't really aware of how investing works all together. I definitely want to learn more but for now I'm just saving as much as I can to invest in index funds and then keeping my expenses low.

It's pretty amazing to me that it's possible to double the amount of money I have! If I just keep putting money in over the next few years I'll be in a good spot.

[neo von retorch]

With a good savings ratio, it will be faster than 7 years, but in the background, the investment returns will really help.

Starting in 2011 (end of year) here was my net worth:

2011   1x
2012   1.6x
2013   2.1x
2014   3.1x
2015   4.1x
2016   5.3x
2017   7.7x
2018   8.9x
2019   11.4x
2020   13.8x
2021   17.0x
2022   15.4x
2023   19.0x
2024   23.0x (so far)

Early on my net worth was doubling every 2-3 years. Now it's growing at a much larger absolute pace, but doubling takes longer. (Still, we're not yet halfway through 2024, and I'm past 2x the end of 2019...)

[2Birds1Stone]

Thanks everyone for the replies... much appreciated.

This kind of confirms what I was thinking and is good news.

So nothing is guaranteed of course... but historically speaking that has been the performance. Which is good news to me.

I am reinvesting dividends and I'm putting over 7k of new money in each month as long as my second job holds out for a few more months.

Sounds like maybe the 2045 funds aren't a bad play either.

I'm really glad I found MMM I wasn't really aware of how investing works all together. I definitely want to learn more but for now I'm just saving as much as I can to invest in index funds and then keeping my expenses low.

It's pretty amazing to me that it's possible to double the amount of money I have! If I just keep putting money in over the next few years I'll be in a good spot.

Target date funds are typically inferior to just picking an asset allocation and using Stock/Bond ETF to meet your goals.

Just FYI.......as far as the math and projections.....there's a ton of compounding calculators that allow you to factor in contributions on top of a projected ROI.......but no one knows the sequence of returns, inflation, etc in any sort of predictable manner so it's all just fun and games.

[J.P. MoreGains]

Yeah, I've been going with target date funds due to not knowing that much. Hoping to change that.

I currently have some S&P 500, some VTSAX, an international index as well. Also a bonds fund through Vanguard.

But have been opting for more 2045 funds with my work 401k and 457b. Plus when I have been contributing to my roth it's been into a 2045 fund.

So maybe I reexamine this soon. Plus eventually I want to talk to a tax professional about optimization there.

Also I have to say that the first big loss will be painful... for example I'm about to hit 200k. If there are big losses and I go below 200k that would hurt some but I have to be ready for it.

[Morning Glory]

I thought it was ten years, but maybe that is if you account for inflation??? Either way it is only an average.

Remember you don't gain or lose anything until you sell your shares. The value going up and down is meaningless unless you are planning to sell soon.

[Chris Pascale]

Looking at my 403b, I have an avg return the last 5 years of 11%. Don't have more data because I started the account 5 years back.

[daverobev]

There's no guarantee. There's nothing to say the US will keep growing faster than the rest of the world (there are lots of reasons for, and lots of reasons against, this happening). There are 'lost decades'. The US is now expensive by pretty much all metrics. That doesn't by itself mean anything, because growth can move one side of the equation.

There is no 'typically'.

I mean, look - https://g.co/finance/.INX:INDEXSP?window=MAX ~ 750 at the end of 1996. 2003, 2010, 2017, 2024 - that would be 4 doublings -> 1500, 3000, 6000, 12000. Nowhere near that number.

Start of 2009 - 13 years after that chart starts - the index hadn't gone up at all!

Now, this isn't including dividends, but still.

[Heckler]

There's no guarantee. There's nothing to say the US will keep growing faster than the rest of the world (there are lots of reasons for, and lots of reasons against, this happening).

https://www.callan.com/periodic-table/

Always my favorite visualization of this fact. The S&P 500 is shown as blue (Large Cap Equity)

  "The Periodic Table of Investment Returns depicts annual returns for key asset classes, ranked from best to worst performance for each calendar year."

[Heckler]

VTSAX is similar to an S&P 500 index fund but the difference is it is a statistical representation of the US Economy and diversifies more by including investments in smaller companies not represented in the S&P 500. It also represents investing proportionally in different sectors of the US economy.

A holding of VTI (which is the ETF equal to VTSAX) built up over 7 years with $C 122,000 of pre-tax contributions to a tax deferred account was valued at $C 123,305 on June 1, 2020.  The owner stopped contributions on June 30, 2020.  Today it is valued at $C 292,000.  All but $U 1,700 of dividends were reinvested, with no withdrawals. 

Note the total values are in Canadian Dollars with the exchange rate at the time.  The contributions were made to a $C S&P 500 index fund, then converted to VTI annually.

The last four years (2.4x before tax) have been a little silly.  Buy and hold works though.

[Heckler]

VTSAX is similar to an S&P 500 index fund but the difference is it is a statistical representation of the US Economy and diversifies more by including investments in smaller companies not represented in the S&P 500. It also represents investing proportionally in different sectors of the US economy.

A holding of VTI (which is the ETF equal to VTSAX) built up over 7 years with $C 122,000 of pre-tax contributions to a tax deferred account was valued at $C 123,305 on June 1, 2020.  The owner stopped contributions on June 30, 2020.  Today it is valued at $C 292,000.  All but $U 1,700 of dividends were reinvested, with no withdrawals. 

Note the total values are in Canadian Dollars with the exchange rate at the time.  The contributions were made to a $C S&P 500 index fund, then converted to VTI annually.

The last four years (2.4x before tax) have been a little silly.  Buy and hold works though.

Note this VTI holding is only a portion of a globally balanced portfolio with 30% fixed income and the rest "international" though!  Due to the Callan Periodic table, your Vanguard Target Date fund is perfectly diversified, and will also increase fixed income as you get closer to the target.

https://investor.vanguard.com/investment-products/mutual-funds/profile/vtivx#portfolio-composition

PS, if anyone cares to challenge my cherry picking of dates, it's not chosen due to pandemic lows, it simply corresponds to the planned date to stop contributions to that account. 

[J.P. MoreGains]

Yeah, nothing is guaranteed. But... it costs more to not invest and not even try. I feel good now that I'm at least working toward FI and making progress.

Hopefully there are some strong years ahead.

It's all a good lesson in fear and doubt.

[Psychstache]

With a good savings ratio, it will be faster than 7 years, but in the background, the investment returns will really help.

Starting in 2011 (end of year) here was my net worth:

2011   1x
2012   1.6x
2013   2.1x
2014   3.1x
2015   4.1x
2016   5.3x
2017   7.7x
2018   8.9x
2019   11.4x
2020   13.8x
2021   17.0x
2022   15.4x
2023   19.0x
2024   23.0x (so far)

Early on my net worth was doubling every 2-3 years. Now it's growing at a much larger absolute pace, but doubling takes longer. (Still, we're not yet halfway through 2024, and I'm past 2x the end of 2019...)

Interesting analysis. I only have data back to 2014, but mine is:

2014   1x
2015   1.3x
2016   1.56x
2017   2.27x
2018   2.28x
2019   2.77x
2020   3.49x
2021   4.34x
2022   3.49x
2023   4.67x
2024 4.96x as of April 2024.

Couple of bumps in there due to life getting in the way of stashing, and things looks less impressive due to the higher base from when i starting tracking my data. Based on my estimates if I could use my '12 Stache as a starting point I would be at around 13x right now.

Note: data represents the investment stache. NW data is way more up and to the right, but that is mostly due to well timed home purchase and bonkers RE market.

[EliteZags]

target date funds are trash, wayy too heavy in bonds and international for anyone that's trying to build real wealth over time, most just default into it not knowing any better thinking it's the best standard or they can't mentally stomach short term volatility and rob themselves of returns over time

target date funds are like the Dave Ramsey of investments, helping the poor stay slightly less poor

[erp]

With a good savings ratio, it will be faster than 7 years, but in the background, the investment returns will really help.

Starting in 2011 (end of year) here was my net worth:

2011   1x
2012   1.6x
2013   2.1x
2014   3.1x
2015   4.1x
2016   5.3x
2017   7.7x
2018   8.9x
2019   11.4x
2020   13.8x
2021   17.0x
2022   15.4x
2023   19.0x
2024   23.0x (so far)

Early on my net worth was doubling every 2-3 years. Now it's growing at a much larger absolute pace, but doubling takes longer. (Still, we're not yet halfway through 2024, and I'm past 2x the end of 2019...)

Interesting analysis. I only have data back to 2014, but mine is:

2014   1x
2015   1.3x
2016   1.56x
2017   2.27x
2018   2.28x
2019   2.77x
2020   3.49x
2021   4.34x
2022   3.49x
2023   4.67x
2024 4.96x as of April 2024.

Couple of bumps in there due to life getting in the way of stashing, and things looks less impressive due to the higher base from when i starting tracking my data. Based on my estimates if I could use my '12 Stache as a starting point I would be at around 13x right now.

Note: data represents the investment stache. NW data is way more up and to the right, but that is mostly due to well timed home purchase and bonkers RE market.

Ditto - I thought this was a neat way to represent wealth growth. I have data from 2010, but used 2012 as a benchmark year (no inflation correction, very crude numbers):

2010:  0.35x
2011:  0.64x
2012:  1.00x
2013:  1.67x
2014:  1.72x
2015:  2.27x
2016:  3.44x
2017:  5.21x
2018:  6.61x
2019:  7.29x
2020:  9.03x
2021:  12.84x
2022:  14.63x
2023:  18.63x

It doesn't feel like much as it's happening, but it sure adds up over a decade or two (nb - the absolute numbers are much less impressive, using multiples really makes this growth feel more substantial).

[secondcor521]

A recent thread on Bogleheads with nearly the same topic:

https://www.bogleheads.org/forum/viewtopic.php?t=431788

[Retire-Canada]

A friend recently told me that investments in the S&P 500 typically will double every 7 or so years.

This seems too good to be true... is this really the case?

So investing in a low fee S&P 500 index fund has a lot of potential benefit.

Just to add some reality to the mix. Most people do not achieve the theoretical return of the market because they do goofy things like trying to pick individual stocks, pull their money out when they get scared [sell low], put it back in when things are looking good [buy high], etc...

At first you kind of think "Idiots!" I'll never do that and then you have $500K or $1M+ on the line and your emotions are harder to control. Fear and/or greed can be powerful.

My personal advice is come up with a simple investing plan like a one fund portfolio [ie. VGRO, VEQT, etc...] and automate the process as much as you can. The less you look at the overall portfolio value the less likely you'll feel the urge to do something you'll regret later.

If you have nerves of steel then you are golden. If you don't setup your investing system to insulate yourself from yourself as much as possible.

[J.P. MoreGains]

I like that Bogleheads article and much of the other info here... the only problem is that I really don't understand a lot of the terms. I want to start reading more about investing, inflation, rule of 72, etc. Right now my strategy is the more I work and the more I put in the better which is good for a passive long term strategy I think. I have a friend who active trades but doesn't save and put a lot of new money in. So my strategy of put at least 5k of new money in every month will get me farther I think than trying to win at active trading.

@Retire-Canada I can't wait to see what it's like to have that 500k or 1M. I bet it will feel way different then. Even now I'm worried about how I'll react when my investments take a big hit. That will be tough emotionally since I'm putting so much effort in and I'm liking to see my balance grow. I think since I'm new all to this that's why I went with a lot of target 2045 funds. Right now I'm only checking balances at the end of every quarter to avoid seeing the ups and downs along the way. So I put my head down and work for 3 months and put a lot of money in and then calculate how I did at the end of the quarter. So I think insulating myself is a good strategy.

[vand]

J.P. Moregains, btw, has by far the greatest handle on this forum

[EliteZags]

too bad he's not getting MoreGains by throwing returns away in target date funds

[Morning Glory]

The rule of 72 is just a rule of thumb for computing compound interest. 72/the rate of interest =the number of years it takes for the principal to double. e.g. a bond earning 5% interest will take 14.4 years. It doesn't really apply to stocks unless the market behaves in a perfectly average way for multiple years in a row.

[Telecaster]

I like that Bogleheads article and much of the other info here... the only problem is that I really don't understand a lot of the terms. I want to start reading more about investing, inflation, rule of 72, etc. Right now my strategy is the more I work and the more I put in the better which is good for a passive long term strategy I think. I have a friend who active trades but doesn't save and put a lot of new money in. So my strategy of put at least 5k of new money in every month will get me farther I think than trying to win at active trading.

Investing and the stock market in general are very dense topics that you can spend a lifetime learning about.

The good part is you don't need to.  In fact, in order to be successful, you don't need to know much at all.   If you simply make regular contributions into a low-cost index fund you'll be golden.   That's about 95% of what you need to know.   

One issue that you do need to understand a bit about is taxes.   Fortunately, this helpful investment order post tells you what you need to know.

[J.P. MoreGains]

I need to ask my work if they do the mega back door roth. I want to see if I can do that.

Yeah, I need to find a better strategy than the target funds. I want to see if there are other options for my 401k and 457b. Plus my extra money I invest I was putting in VTSAX, S&P500, an International Index, and a bonds Index but I didn't really understand a strategy. So I definitely need a portfolio I understand and that is optimal.

[davef]

With a good savings ratio, it will be faster than 7 years, but in the background, the investment returns will really help.

Starting in 2011 (end of year) here was my net worth:

2011   1x
2012   1.6x
2013   2.1x
2014   3.1x
2015   4.1x
2016   5.3x
2017   7.7x
2018   8.9x
2019   11.4x
2020   13.8x
2021   17.0x
2022   15.4x
2023   19.0x
2024   23.0x (so far)

Early on my net worth was doubling every 2-3 years. Now it's growing at a much larger absolute pace, but doubling takes longer. (Still, we're not yet halfway through 2024, and I'm past 2x the end of 2019...)

Interesting analysis. I only have data back to 2014, but mine is:

2014   1x
2015   1.3x
2016   1.56x
2017   2.27x
2018   2.28x
2019   2.77x
2020   3.49x
2021   4.34x
2022   3.49x
2023   4.67x
2024 4.96x as of April 2024.

Couple of bumps in there due to life getting in the way of stashing, and things looks less impressive due to the higher base from when i starting tracking my data. Based on my estimates if I could use my '12 Stache as a starting point I would be at around 13x right now.

Note: data represents the investment stache. NW data is way more up and to the right, but that is mostly due to well timed home purchase and bonkers RE market.

Ditto - I thought this was a neat way to represent wealth growth. I have data from 2010, but used 2012 as a benchmark year (no inflation correction, very crude numbers):

2010:  0.35x
2011:  0.64x
2012:  1.00x
2013:  1.67x
2014:  1.72x
2015:  2.27x
2016:  3.44x
2017:  5.21x
2018:  6.61x
2019:  7.29x
2020:  9.03x
2021:  12.84x
2022:  14.63x
2023:  18.63x

It doesn't feel like much as it's happening, but it sure adds up over a decade or two (nb - the absolute numbers are much less impressive, using multiples really makes this growth feel more substantial).

With a good savings ratio, it will be faster than 7 years, but in the background, the investment returns will really help.

Starting in 2011 (end of year) here was my net worth:

2011   1x
2012   1.6x
2013   2.1x
2014   3.1x
2015   4.1x
2016   5.3x
2017   7.7x
2018   8.9x
2019   11.4x
2020   13.8x
2021   17.0x
2022   15.4x
2023   19.0x
2024   23.0x (so far)

Early on my net worth was doubling every 2-3 years. Now it's growing at a much larger absolute pace, but doubling takes longer. (Still, we're not yet halfway through 2024, and I'm past 2x the end of 2019...)

My multiplication rate seems lower than the lot of you. As far as I can see, there are 3 possible explanations.
1. My contribution rate was less
2. My investments performed poorly
3. My initial year had a higher dollar amount and thus was less affected by contributions (1.0 =112K in 2011)

Yes, I had 3 kiddos and lots of unplanned expenses in those 13 years
I'm really surprised you all did so well in 2022!
Here is what I have

1/1/2011   1
1/1/2012   1.25
1/1/2013   1.51
1/1/2014   2.49
1/1/2015   2.91
1/1/2016   3.08
1/1/2017   3.69
1/1/2018   4.39
1/1/2019   4.83
1/1/2020   5.69
1/1/2021   7.96
1/1/2022   9.41
1/1/2023   9.11
1/1/2024   10.46

[reeshau]

target date funds are trash, wayy too heavy in bonds and international for anyone that's trying to build real wealth over time, most just default into it not knowing any better thinking it's the best standard or they can't mentally stomach short term volatility and rob themselves of returns over time

target date funds are like the Dave Ramsey of investments, helping the poor stay slightly less poor

You can also game this by simply picking a target date beyond your retirement.  The core fallacy of overly cautious target date funds is that they want you fully in income on the date of your retirement, where you may still have 20+ years to live--even if you aren't FIRE'd.  Inflation still needs to be overcome for that period.

[neo von retorch]

Starting in 2011 (end of year) here was my net worth:

My multiplication rate seems lower than the lot of you. As far as I can see, there are 3 possible explanations.
1. My contribution rate was less
2. My investments performed poorly
3. My initial year had a higher dollar amount and thus was less affected by contributions (1.0 =112K in 2011)

Yeah, I kind of picked that as when things started (mostly) linearly going up. If you pick 2013, divide ALL my numbers by 2.1 and my chart would look a lot like yours!

[effigy98]

No S&P 500 is about even with real inflation. There are so many passive flows that S&P 500 is no longer rooted in fundamentals of companies and mostly just a reflection of the global M2 money supply (currency debasement, the hidden tax). Luckily we have a few asset classes that exceed inflation available.

[oneday]

J.P. Moregains, btw, has by far the greatest handle on this forum

It is pretty outstanding, isn't it? May be what got me to start reading his journal, lol

@J.P.: something foundational you need to understand, if you don't already, is the fees on your investments. VTSAX has like a .04% expense ratio. This is pretty much rock-bottom. I wonder what the expense ratio is on your target date fund? Don't make the mistake of thinking 1% is low. This is a decent article on the topic.

From the section "Importance of the Expense Ratio in Mutual Fund Investing"

After 10 years, the difference in returns behind the highest and lowest fees below is about $22,500. After 30 years, it's near $600,000.

I think of a high expense ratio as a "drag" on my investment return, and want the most "streamlined" investment possible (like a race car or jet plane).

[GilesMM]

Since 1928, nearly a century, the S&P500 CAGR is 9.9%. Let's round up to 10%.  The rule of 72 says this will double your money every 7.2 years.  We can round down to 7 years.  Your friend is correct.


But:

• Past returns are not a guarantee of future results.
• Markets fluctuate.
• Investing involves risk of loss.

[2Birds1Stone]

And let's not forget ~3.1% inflation means that in real terms it takes much longer.

[GilesMM]

And let's not forget ~3.1% inflation means that in real terms it takes much longer.

Yes.  If you want real returns, 7 years turns into a decade.


http://moneychimp.com/features/market_cagr.htm


I don't feel like I get the full brunt of inflation, so I'm happy with nominal returns.

[EliteZags]

target date funds are trash, wayy too heavy in bonds and international for anyone that's trying to build real wealth over time, most just default into it not knowing any better thinking it's the best standard or they can't mentally stomach short term volatility and rob themselves of returns over time

target date funds are like the Dave Ramsey of investments, helping the poor stay slightly less poor

You can also game this by simply picking a target date beyond your retirement.  The core fallacy of overly cautious target date funds is that they want you fully in income on the date of your retirement, where you may still have 20+ years to live--even if you aren't FIRE'd.  Inflation still needs to be overcome for that period.

na the furthest out date is still ~10% bonds which is 10% more than you should have with any long term horizon


also being forced to default 35%+ into international is just asinine throwing returns away, no thanks I'd rather see gains

[J.P. MoreGains]

I need to look at what options I have with my employer 401k and 401b and what the expense ratios are. I think that is where I can make the most improvement since I'm putting 5k total in every month. Right now those are going into target funds. So I want to make a change there.

Problem with two jobs it's hard to find time to do research and learn enough to make a good decision. But I got to put in that effort... that is like a third job that could make me money.

[Telecaster]

I need to look at what options I have with my employer 401k and 401b and what the expense ratios are. I think that is where I can make the most improvement since I'm putting 5k total in every month. Right now those are going into target funds. So I want to make a change there.

Problem with two jobs it's hard to find time to do research and learn enough to make a good decision. But I got to put in that effort... that is like a third job that could make me money.

I've already done the research.    Here's 97% of what you need to know:  Low cost index fund.   

[Nutty]

Agree - low cost index fund.

I have two accounts.  The first 20 years of my career and then the second in a 10 year old 401K at a company that has a 6% match + 4% profit sharing.  I'm more than upset that I have saved more in the last 10 years than I did in the first 20.  I'm here now and quite happy I am smarter than I was. 

The target date funds may have a higher expense ratio than an index fund.  Also, I'm 100% stocks after reading JL Collins.  Always keep learning.

[J.P. MoreGains]

@Telecaster The problem I think I have is that through work I have one account with Corebridge and the other with Empower - what I see as available to us isn't really all that low cost. I kind of feel like the options are limited. So I went with the target fund. This weekend I want to see what I can actually choose and then pick that. I looked a little at Corebridge options available to us and I was kind of disappointed. It felt like there wasn't that many to choose from and none that were simple S&P 500 index or total stock market index. At least from that first look. So I want to see and then ask the advisor and then make a change for both of these.

@Nutty Funny you say 100% stocks... I've thought about that since I save such a high percent of my income and since i'm a minimalist... I kind of feel that I'm willing to take more risk for growth since I feel comfortable doing that. I'll have to look at JL Collins I don't know who that is. I didn't do very well for last 20 years... but I'm on the path now. Wish I would've known this in 1998.

[oneday]

@Telecaster The problem I think I have is that through work I have one account with Corebridge and the other with Empower - what I see as available to us isn't really all that low cost. I kind of feel like the options are limited. So I went with the target fund. This weekend I want to see what I can actually choose and then pick that. I looked a little at Corebridge options available to us and I was kind of disappointed. It felt like there wasn't that many to choose from and none that were simple S&P 500 index or total stock market index. At least from that first look. So I want to see and then ask the advisor and then make a change for both of these.

@Nutty Funny you say 100% stocks... I've thought about that since I save such a high percent of my income and since i'm a minimalist... I kind of feel that I'm willing to take more risk for growth since I feel comfortable doing that. I'll have to look at JL Collins I don't know who that is. I didn't do very well for last 20 years... but I'm on the path now. Wish I would've known this in 1998.

It is often the case that company retirement plans have higher fees because there are more fingers in the pie. Not your employer, but the third party plan administrator, the platform provider, the advisor, the investments themselves. It is still worthwhile to try to minimize the fees and maximize performance.

Here's the link to Part I of JL Collins stock series: https://jlcollinsnh.com/2012/04/15/stocks-part-1-theres-a-major-market-crash-coming-and-dr-lo-cant-save-you/

And the full series (36 parts): https://jlcollinsnh.com/category/stock-investing-series/

And his book, which may be in a library near you. Read either the book or the blog, as far as I know they cover the same ground:  https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926

He's also been on the ChooseFI podcast a number of times, if you prefer to listen:
https://www.choosefi.com/019-jlcollinsnh-stock-series-part-1/
https://www.choosefi.com/034-stock-series-part-2-jl-collins/
(to get started)

[reeshau]

@Telecaster The problem I think I have is that through work I have one account with Corebridge and the other with Empower - what I see as available to us isn't really all that low cost. I kind of feel like the options are limited. So I went with the target fund. This weekend I want to see what I can actually choose and then pick that. I looked a little at Corebridge options available to us and I was kind of disappointed. It felt like there wasn't that many to choose from and none that were simple S&P 500 index or total stock market index. At least from that first look. So I want to see and then ask the advisor and then make a change for both of these.

@Nutty Funny you say 100% stocks... I've thought about that since I save such a high percent of my income and since i'm a minimalist... I kind of feel that I'm willing to take more risk for growth since I feel comfortable doing that. I'll have to look at JL Collins I don't know who that is. I didn't do very well for last 20 years... but I'm on the path now. Wish I would've known this in 1998.

It is often the case that company retirement plans have higher fees because there are more fingers in the pie. Not your employer, but the third party plan administrator, the platform provider, the advisor, the investments themselves. It is still worthwhile to try to minimize the fees and maximize performance.

Do either of your accounts have a brokerage window feature?  This lets you go outside the plan's menu, and often trade any stock, etc, or fund.

It doesn't entirely get you out of fees for managing the plan; it does make those more explicit.  You will pay the going retail rate for your index fund, and be charged an explicit plan management fee (expressed as a percentage) on the money you have in the brokerage window.

[2Birds1Stone]

d00d, just take a screenshot of the options showing the annual fees and you'll get some great guidance here. Some of us thoroughly enjoy analyzing this stuff.

[EliteZags]

@Telecaster The problem I think I have is that through work I have one account with Corebridge and the other with Empower - what I see as available to us isn't really all that low cost. I kind of feel like the options are limited. So I went with the target fund. This weekend I want to see what I can actually choose and then pick that. I looked a little at Corebridge options available to us and I was kind of disappointed. It felt like there wasn't that many to choose from and none that were simple S&P 500 index or total stock market index. At least from that first look. So I want to see and then ask the advisor and then make a change for both of these.

 I believe all major 401K programs are required to offer at least one low fee (<0.1%) fund that tracks total market/S&P, and a total bond one, aside from the standard garbage target date funds they try to default you into.
One of my old 401Ks now with Fidelity only has it labeled as US EQUITY INDEX FUND with a symbol TFCZ that you can't even look up otherwise, but the profile states: Objective- Seeks to track the performance of the Russell 3000® Index. 0.0125% fee

[J.P. MoreGains]

Okay everyone thanks for the great help. Been busy with two jobs so I can't always reply right away. So here is what I found.

Corebridge

Just sent this to my one advisor at Corebridge:


I want to reach out and ask about changing from the existing Target 2045 fund I have to a different fund.

There are a few things I want to ask:

Is there a brokerage window that would let me go outside of the menu of option and trade any stock or fund that I choose? If so how could I do that and what would the management fee be?

I've heard that all 401k plans (I'm not in a 401k here but still asking about this for the 457b) have to offer at least one low fee (< 0.1%) that tracks the total market or similar. Is this the case and does Corebridge have such a fund.

I've found the Valic Co I Stock Index here which is more or less what I'm looking for but I want to see if there is one with a lower expense ratio or if I can trade through a brokerage window.

 https://my.valic.com/ARO/FundPerformance/FundFactSheet.aspx?t=A&i=83

Thanks for your help. After I learn of an option I would like to do I'll plan on moving my funds to the new fund.

Can I do that online myself or do I need help from Corebridge to move my existing investments and new contributions to the new fund?

The above fund would be way better than the 0.87% Expense Ratio in the target fund I'm in:
https://my.valic.com/ARO/FundPerformance/FundFactSheet.aspx?t=A&i=183

Plus I get a "Tax Sheltered Annuity Charge" of 0.50 per paycheck which I think goes to Corebridge to manage the plan or to my employer.

Empower

And I found this fund for Empower:
https://docs.empower.com/Empower-Investments/PDF/empower-funds/fund-documents/S&P-500-Index-Fund.pdf?_gl=1*b9i6s5*_ga*NTgwMTc3NzM0LjE3MTc2ODEyNDA.*_ga_S09Y9FKM93*MTcxNzY4MTI0MC4xLjEuMTcxNzY4MTM5NC4zOC4wLjA.

I think I would be an "Instl" Institutional Investor since I'm in the 401k plan so I think I would get the 0.15% Expense Ratio.

That is a big improvment over this 2045 fund I'm in with a 0.57 Expense Ratio
https://docs.empower.com/Empower-Investments/PDF/empower-funds/fund-documents/Lifetime-2045.pdf?_gl=1*1ghd1ve*_ga*NTgwMTc3NzM0LjE3MTc2ODEyNDA.*_ga_S09Y9FKM93*MTcxNzY4MTI0MC4xLjEuMTcxNzY4MTQ2Ni42MC4wLjA.


Second Job - TIAA
With my second job I have contributions to TIAA... just started those so less than 2k in there I think. I'm going to look at using this fund:
https://www.tiaa.org/public/investment-performance/investment/profile?ticker=W574

Vanguard Existing Investments
I have some work to do here to get out of a target fund there. I'm not entirely in a target fund but out of ignorance I went with it. Going to move that as well.

I've thought about doing the Bogleheads Three Fund Portfolio Strategy here: https://www.bogleheads.org/wiki/Three-fund_portfolio

Notes
Tough situation I'm in being a banking magnate and not knowing investments! Phase 1 has been try to make money and lower costs and save. Now I have to optimize and learn about this stuff for sure. Already I've seen how I've gotten better with tracking expenses and being better overall with earning and saving. So now I have to do the same for investing. I want to start getting this right. I work too hard to lose money to fees. I want to hit FI so got to learn about this.

Been kind of busy but next week I'll see if I can post some screenshots of where I'm at. I have problems uploading pics/shots sometimes but I want to get something up so I can get more advice.

Thanks

[dandarc]

Does Empower not list specifically what is available in your specific plan?

Institutional shares are not automatically the ones you'll have available in your plan - often depends on the size of the 401K and negotiations with the business that sponsors the plan. But there should be a full list of all the funds available in the plan somewhere.

[J.P. MoreGains]

Okay, good news and bad news.

Bad news: a little embarrasing but I stand corrected on my own investments. Turns out I have access to funds that aren't just listed on the website. Maybe because I work for government.

Good news: turns out the expense ration on these is better than I expected.

My 401k target 2045 is 0.07% . I could change this to a fund that tracks the MSCI Large Cap for 0.05% and I think I may do that. Turns out my 457b is Vanguard VTIVX with a 0.08% ratio. This I could change to Fidelity 500 FXAIX for a 0.02% expense ratio.

These were funds I could see after I logged in that I have access to. So basically I could go to those two new funds and lower the expense ratio and go all toward stocks. Either way the target funds I have aren't as high expense ratio as I thought just by looking at the website. Who would've though I have access to different funds?

More Bad News: The TIAA fund is high expense without a lot of other good options - this one I'll ask HR about. But I only may have another few months at this job and then I can roll it over.

[J.P. MoreGains]

These are the corebridge I have and can switch to.

The TIAA situation isn't good. The fund I'm in has a high expense ratio as do all of the funds I can choose from. So I'm going to ask HR and make a call to TIAA to see about it.

[oneday]

Sometimes retirement plans are like that (high-fee). IMO, it's predatory on the part of the investment firms, because the employees have little choice. Many cannot afford to pass up on the tax exemption for their investment funds.

Do you have any index funds in TIAA? The ones in your screen shot are target date or actively managed (based on the names, I didn't look them up).

When you do the rollover, do not roll into TIAA! Roll into an IRA at an institution that you prefer, with low fees.

[FLBiker]

It sounds like your TIAA options are really limited.  I also have a TIAA account (403b from the state of Florida) and I have Vanguard Admiral funds in mine.  My point is that high fees aren't inherent to TIAA.  I wonder if your options would expand once you were no longer working for that employer -- kind of like an internal (to TIAA) rollover?