The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: jasonown on November 20, 2019, 10:49:05 AM
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Hi all I started a new job and wanted advice on which funds to choose. It is a vanguard 403b plan. I’m currently 25 years old and I heard that it is good to have a mix in your portfolio but right now I just have 100% in the VITPX because it has the lowest expense ratio. Below are the index fund options. I’m a noobie so any advice is greatly appreciated!
VBMPX Total bond market index fund- 0.03% expense ratio
FTSE Social index fund institutional shares- 0.12%
VITPX Institutional Total Stock Market - 0.02%
VPMAX Primecap Admiral- 0.31%
VIVIX Value Index Fund- 0.04%
VWILX Internal Growth Admiral- 0.32%
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Looks like you've got great options!
I would go with a mix of...
VBMPX Total bond market index fund- 0.03% expense ratio
VITPX Institutional Total Stock Market - 0.02%
... depending on your desired asset allocation and add an international stock fund in an IRA or taxable account.
https://www.bogleheads.org/wiki/Asset_allocation would be worth a read.
Anywhere from 70-100% stock would be reasonable. I'd just do 100% at your age, so no bonds.
Many would consider anywhere from 0-40% international would be reasonable, though I would tend more towards the 20-40% range.
If you have Vanguard target date funds available in your 403(b) that would also be a fine option. In the institutional class shares have very low expense ratios.
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I'm envious of your plan options, and I wish we had a similar package where I work. In my case (I've actually posted here about it before,) our 403b plan has extremely high expense ratios. I don't want to hijack your topic, but does anyone know the best way to get our VP of HR, CFO, and our President to change plans?
But, yes, the above response is great - you don't have to worry too much about any bonds at your age.
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I don't want to hijack your topic, but does anyone know the best way to get our VP of HR, CFO, and our President to change plans?
https://www.bogleheads.org/wiki/How_to_campaign_for_a_better_403%28b%29_plan and https://www.bogleheads.org/wiki/How_to_campaign_for_a_better_401(k)_plan
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I don't want to hijack your topic, but does anyone know the best way to get our VP of HR, CFO, and our President to change plans?
https://www.bogleheads.org/wiki/How_to_campaign_for_a_better_403%28b%29_plan and https://www.bogleheads.org/wiki/How_to_campaign_for_a_better_401(k)_plan
Quick and on-point, terran. Thank you!
(...maybe I'll start another topic updating on the progress.)
Sent from my SM-N950U using Tapatalk
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Looks like you've got great options!
I would go with a mix of...
VBMPX Total bond market index fund- 0.03% expense ratio
VITPX Institutional Total Stock Market - 0.02%
... depending on your desired asset allocation and add an international stock fund in an IRA or taxable account.
https://www.bogleheads.org/wiki/Asset_allocation would be worth a read.
Anywhere from 70-100% stock would be reasonable. I'd just do 100% at your age, so no bonds.
Many would consider anywhere from 0-40% international would be reasonable, though I would tend more towards the 20-40% range.
If you have Vanguard target date funds available in your 403(b) that would also be a fine option. In the institutional class shares have very low expense ratios.
Thanks for the reply! So just to clarify, I should just stick to 100% into VITPX-0.02% expense
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Thanks for the reply! So just to clarify, I should just stick to 100% into VITPX-0.02% expense
I agree that this is a very reasonable choice at your age.
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Overall that looks like a you have some good options. I do find it interesting that the only international fund you listed as an option is a growth fund. I would expect a lower cost market-cap weighted international fund as an option. With the options listed, I'd stick with VITPX for stocks and use my IRA for any international allocation I wanted.
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Great advice from terran. No need for a bond fund in a retirement account at your age. If you're feeling frisky, maybe do a mixture of the other 5 options to equal %'s or whatever % feels good to you.
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Great advice from terran. No need for a bond fund in a retirement account at your age. If you're feeling frisky, maybe do a mixture of the other 5 options to equal %'s or whatever % feels good to you.
I read the sticky post for the step by step order of investing. It says to do the match but then invest it in a personal 401k. Since I have good options in my 403b is it okay for me to just max out this account? I’m currently putting in 5%. I don’t have company match yet until I am there for one year and then the match is 2%.
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Great advice from terran. No need for a bond fund in a retirement account at your age. If you're feeling frisky, maybe do a mixture of the other 5 options to equal %'s or whatever % feels good to you.
I read the sticky post for the step by step order of investing. It says to do the match but then invest it in a personal 401k. Since I have good options in my 403b is it okay for me to just max out this account? I’m currently putting in 5%. I don’t have company match yet until I am there for one year and then the match is 2%.
Hmmm....I'll divert to the more senior mustachian investors for that one
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Great advice from terran. No need for a bond fund in a retirement account at your age. If you're feeling frisky, maybe do a mixture of the other 5 options to equal %'s or whatever % feels good to you.
I read the sticky post for the step by step order of investing. It says to do the match but then invest it in a personal 401k. Since I have good options in my 403b is it okay for me to just max out this account? I’m currently putting in 5%. I don’t have company match yet until I am there for one year and then the match is 2%.
Yes, it's fine to go for the one with the lowest expense ratios. You can mostly treat your IRA, 401k, and/or 403b as interchangeable and prioritize the one(s) with the best fund options. The main benefit of going for an IRA is more control so all else equal that's why you would choose that over a 401k/403b.
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Personally I'd probably open an IRA to have access to a good international fund, but just sticking with the 403(b) and 100% VITPX wouldn't be a bad idea either (maybe not quite optimal, but still very good).