Author Topic: help me choose 403b (Vanguard!) funds  (Read 1481 times)

Dagmar

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help me choose 403b (Vanguard!) funds
« on: November 02, 2016, 07:46:16 PM »
We want to switch my husband's 403b and we found two options with Vanguard funds:

Aspire
$40 per year recordkeeping fee
.15% custodial fee, 4 times per year
$75 distribution fee (to change to other vendor)
can enroll directly, so no advisor fees

lists about 200 Vanguard funds, including Target Retirement

NEA DirectInvest (through Security Benefit)
$35 per year admin fee for accounts under $50,000
no advisor fees

8 Vanguard funds (Investor/Admiral expense ratios - the prospectus listed the admiral)
500 Index (.16/.05)
Total Stock Market Index (.16/.05)
Mid Cap Index (.20/.08)
Small Cap Index (.20/.08)
Growth Index (.22/.08)
REIT Index (.26/.12)
Total International Stock Index (.19/.12)
Intermediate Term Bond Index (.16/.09)

Our basic info:
annual income: $66,000 to $69,000 for 2017
projected 2017 savings: $12,000+ (in after-tax dollars)
403b: ~$24,000
his Vanguard Roth IRA: $1,000
my Vanguard Roth IRA: currently $2,000 but can max it out this year
other Roth IRA: $5,000 (will switch to Vanguard soon)
desired asset allocation: 90% stocks (maybe 54/36ish US/International) and 10% bonds -- I'm just sort of guessing at this and following the 2045 Target Retirement mix; I'm currently reading All About Asset Allocation to get a better understanding of everything

We haven't invested our Vanguard Roth money in any funds yet -- we were waiting to choose the 403b first.  I was initially interested in the Target Retirement funds, but have been reading info on the forum about whether it's worth it or not if you're going to be doing any other balancing between accounts anyway. In general, I like the idea of "set it and forget it" accounts, but I'm willing to check up on things a few times a year if it saves me money/hassle in the future.

Questions:

Is NEA the obvious choice, assuming it truly doesn't have any other fees? (Am I missing something?)

And then if so, which funds do you recommend?  (for the Roths as well)

Does the admiral/investor class thing work just like if we were investing directly through Vanguard -- we'll be in investor class until we hit $10,000 or whatever the minimum is, and then it will automatically change?

I'm pretty new to this, so I appreciate any advice that points me in the right direction.  Thanks!

seattlecyclone

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Re: help me choose 403b (Vanguard!) funds
« Reply #1 on: November 02, 2016, 08:40:28 PM »
The NEA option does look better. The flat fee is lower and a quarterly fee of 0.15% is just a killer.

As to funds, it really depends on what your asset allocation is. What percentage of your money do you want to put into US stocks? Use the Total Stock Market Index for that. And so on... The asset allocation depends on your own risk tolerance and we can't really advise you on that.

Mr.GrowingMustache

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Re: help me choose 403b (Vanguard!) funds
« Reply #2 on: November 03, 2016, 02:50:32 PM »
We just switched to Aspire... NEA looks like the better option.

Finding information on the 403b for my wife has been a pain in the ass, nobody knows anything. It takes a random post on the internet to find this out. I am looking into NEA now to see if it is a part of her allowed plans.


Dagmar

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Re: help me choose 403b (Vanguard!) funds
« Reply #3 on: November 03, 2016, 07:15:52 PM »
Thanks, seattlecyclone.  I'm still figuring out our asset allocation.

Mr. GrowingMustache -- It IS a pain in the ass!  I hope my information about NEA is correct.  We've made so many phone calls and emails and I still don't trust that I have all of the right info.  I can't believe there isn't another fee for NEA, but when I read through the custodial agreement, it only mentioned the $35 one.  Here are the websites with the info:

https://www.securitybenefit.com/individuals/products/mutual-fund-custodial/nea-directinvest.aspx
http://www.nearetirementprogram.com/enrollment

I'll let you know if I find out anything else.