Looking for input on my plan to shake up my savings plan, with the goal of lowering expense ratios and to retire in 10 years or less:
I've always used the Lifecycle/Target Date Retirement Funds, as I didn't know better, and maybe I still don't know any better, but have become obsessed with expense ratios
What I have right now is the following (rounded slightly):
401(k) - $89,900 Fidelity Freedom 2040 (FFKFX) Expense Ratio .68% Average yearly contribution: $8,000
Roth IRA - $69,500 Fidelity Freedom 2040 (FFFFX) Expense Ratio .81% Max out yearly contribution: $5,500
Generic Retirement Fund - $ 43,600 Vanguard Total Stock Market Admiral (0085) Expense Ratio .05%, avg yearly contribution $2000
Taxable Account - $19,000 Vanguard Total Stock Market Admiral (0085) Expense Ratio .05%, plan on $12,000/year savings
Cash - $81,000 that I've been too afraid to invest yet....
Total Investments/cash: $303000
Total approximate yearly investments:$27,500
So with my 401(k), I have to stick with Fidelity, but upon advice from awesome Mustachians, I see that I have two spartan options, the SPTN 500 INDEX INST (FXSIX) Expense Ratio .05% and the SPTN EXT MKT IDX ADV (FSEVX) with a .07% expense ratio.
So my thinking is that the taxable account has a shorter time horizon, so should be a less volatile mix of stocks/bonds, whereas the retirement accounts will be used last, so can be invested more heavily in the stock market.
The following is my plan so far (after much beating my head against the wall):
401(K) - Fidelity Spartan 500 Index Fund = $89,900 in STOCK + $8,000/yr
Roth IRA - Rollover to Vanguard Total Stock Market Admiral = $69,500 + $5,500/yr STOCK
Generic Ret. Account - Keep at Vanguard Total Stock Market Admiral = $43,600 + $2,000/yr STOCK
Taxable Account - Move to Vanguard Balanced Fund (VBIAX) = $100,000 (60/40 stock/bond) + $12,000/yr
The totals for right now would equal a portfolio that is about 13.2% Bond, and 86.8% Stock, with expense ratios .09% or lower. If I don't account for the ups and downs of the market and dividends, then the balance moves very slightly to more bonds, less stocks with the above contributions, but I can't really guess how it would go exactly. I don't want to get too complicated by introducing international stocks/bonds, otherwise I would just go to the Target Retirement date funds which do that for me. Vanguards' equivalent to what I have right now has a .18% expense ration, still vastly below Fidelity's...I am open to that idea as it is simplest in my opinion...
Any input on the above plan? Any general advice on other options? Sorry, I can't figure out how to be more concise...
Thanks in advance.