We're still are relatively new to this site & investing. Around 6 months ago, we went with a Target Fund account with my husband's 401k because it just seemed easier to understand.
We just received a letter a couple of weeks ago from Fidelity that they will be adding an additional management fee to our 401k starting June 1, 2017. Of course, now we are contemplating the other fees & realize this can add up really quickly.
So here is what we have currently:
PMP Fund 2055: $47,503.67
Expense Ratio: .41%
NEW Management Fee: .0375% added to each investment fund
Recording Fee: $3.25 (monthly)
OR we could switch funds:
Equity Index Fund: .05% + new fee: .0375%= .0875%
Bond Index Fund: .06% + new fee: .0375%= .0975%
International Index Fund (On the fence): .13% + new fee .0375%= .1675%
*Leaning more to not having international fund due to Total Market exposure.
*We are on the fence with even putting it all in the Equity Index Fund w/o Bond Index Fund due accumulation stage.
Hypothetically, if we go with Equity/Bond Index= .185% instead of the Target Fund= .41%
Is it really worth it to switch funds at this point? It's not a lot of money right now but as the numbers grow could this really affect the outcome?
This would be a easier choice if we had the option of Vanguard Target Fund ER: .16%
I read many people switch to Target Funds (Vanguard) because it's easier but are there any that switch out of Target funds to 2-3 fund to save on the ER?
Thank you for any insight that we are not considering.