Author Topic: Mimic Vanguard Total Stock Market Index Fund in 403(b)?  (Read 2347 times)

MrGville

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Mimic Vanguard Total Stock Market Index Fund in 403(b)?
« on: February 01, 2017, 08:42:02 AM »
My wife is eligible for a 403(b) at her job, but we are unsure if this is the best place to allocate our money.  We have the financial ability to max out her 403(b) and both of our traditional IRAs this year, but we want to make sure this makes sense.  We are also unsure of the difference between a 403b and a 401k.  Neither of us can participate in 401ks through our jobs, but we want to make sure there is nothing about a 403b that makes it an expensive place to invest.

Her 403(b) is through TIAA Cref.  They offer the following Vanguard funds:

Vanguard Institutional Index Fund Institutional (VINIX)
Vanguard Total Bond Market Index Fund Admiral (VBTLX)
Vanguard Extended Market Index Fund Admiral (VEXAX)
Vanguard Federal Money Market Fund Investor (VMFXX)
Vanguard Total International Stock Index Fund Admiral (VTIAX)

Is it possible to invest in a few of the above funds to mimic VTSAX?  I am happy to provide any additional information that is needed to give a thorough answer. 

Thanks!

Gemini

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Re: Mimic Vanguard Total Stock Market Index Fund in 403(b)?
« Reply #1 on: February 01, 2017, 11:26:37 AM »
I'm in a similar situation. This link helped:

https://www.bogleheads.org/wiki/Approximating_total_stock_market

VINIX is a S&P 500 index (equivalent to VFINX with a better expense fee) and VEXAX indexes the rest of the total market. Bogleheads says to use a 81%/19% mix to approximate total market. 8:2 is close enough for me and simplifies the math.

Check if your 403b has a management fee. I probably will but it could be reasonable and partially offset by the lower VINIX fees

MrGville

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Re: Mimic Vanguard Total Stock Market Index Fund in 403(b)?
« Reply #2 on: February 01, 2017, 11:31:34 AM »
I'm in a similar situation. This link helped:

https://www.bogleheads.org/wiki/Approximating_total_stock_market

VINIX is a S&P 500 index (equivalent to VFINX with a better expense fee) and VEXAX indexes the rest of the total market. Bogleheads says to use a 81%/19% mix to approximate total market. 8:2 is close enough for me and simplifies the math.

Check if your 403b has a management fee. I probably will but it could be reasonable and partially offset by the lower VINIX fees

Excellent, thanks for the advice and the link.  How can I tell if there is a management fee?  Should my wife ask her employer this questions, or can we find this fee listed somewhere on her TIAA Cref account?

Gemini

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Re: Mimic Vanguard Total Stock Market Index Fund in 403(b)?
« Reply #3 on: February 01, 2017, 11:42:59 AM »
You're welcome. The administrative fee should be somewhere in the Plan paperwork or website. Hopefully they are upfront about it. My yearly fee is $20 plus 0.042% on the first $200,000 of my balance.