Hello everyone,
I posted this in the 100% stock allocation thread but am making a new thread based on suggestions here.
Right now I am 28.5 years old and 100% stocks split the following:
22k in a taxable account in VTI (TD Ameritrade)
34k in a Roth IRA in VTI (TD Ameritrade)
135k in my 401k S&P 500 fund (HBIDX) with a 0.56% expense ratio
If I wanted to reallocate to 80/20 I would need to convert about 35k to bonds.
Here's the question:
I could convert my entire Roth IRA to BND and its .08% expense ratio. That would be the "cheapest" option (no taxes, no transaction fees) however I never know how to view post tax Roth dollars vs pretax 401k dollars. Nominally it is about 20%, but not having to pay taxes on it verses my other accounts makes it worth less to me.
The other option is to covert 35k from my 401k to one of the available bond funds...all have expense ratios between 1.1% and 1.3%.
The bond funds available in my 401k are:
Goldman Sachs Government Inc R GSORX Bond 1.16%
PIMCO Real Return R PRRRX Bond 1.13%
PIMCO Total Return R PTRRX Bond 1.10%
Putnam High Yield Advantage R PFJAX Bond 1.29%
If a bond is only going to pay me 3% or 4% it seems silly to me to give away 33% or more of my return in fees.
What would you do?
EDIT: I should also add that there is a fixed/stable money market account available that pays a guaranteed 3% with no fees available in my 401k.
