So yeah, 0.91% is high compared to the TSP and Vanguard, but would anyone here flinch at that rate?
What other fund options do you have in your plan? Is your fund the cheapest offered?
There is a "rule of thumb" in the Bogleheads' 401k wiki entry (http://www.bogleheads.org/wiki/401%28k%29#Expensive_or_mediocre_choices): ''consider investing in a taxable account if the product of the extra costs and the number of years you will stay in the plan exceeds 30%." Unfortunately the conditions under which that rule is appropriate aren't given, so caveat user.
The Bogleheads wiki also links to http://thefinancebuff.com/alternatives-to-a-high-cost-401k-or-403b-plan.html, from which one can access an online evaluation tool.
Most interesting to me was the result that for my situation, Taxable beats Trad IRA. I wasn't expecting that.
Marginal ordinary tax rate at contribution | a | |
Extra fee in the 401k account | b | |
Marginal ordinary tax rate at withdrawal | e | |
Total pre-tax return in the taxable account | i | |
Number of years in the 401k account | n | |
Tax rate on LTCG at taxable withdrawal | w | |
Investment taxable yield (if in taxable account) | y | |
Tax rate on annual investment returns | z | |
Years from now until withdrawal | m | |
Original amount available | P | $5,000 |
Just curious: Where did Roth fall in the ranking? What assumptions did you make for the entries below?Roth was the best alternative. Let's see if this attachment thingy works...
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Most interesting to me was the result that for my situation, Taxable beats Trad IRA. I wasn't expecting that.
....The image you posted shows that a taxable account beats a non-deductable traditional IRA, which is not surprising. You're paying income tax on both ends.
Most interesting to me was the result that for my situation, Taxable beats Trad IRA. I wasn't expecting that.
I would consider any index funds or EFTs that are available to you. If your 401K allows you to have a brokerage window, this may give you more options to invest in EFTs.
Finally, all 401K plans must now disclose fees annually to the participants. Ask for this information, then "follow the money." Many fees are buried, and when you start adding them up it's not uncommon for your 401K to be skimming 1.25-1.5% of returns right off the top.
The image you posted shows that a taxable account beats a non-deductable traditional IRA, which is not surprising. You're paying income tax on both ends.