Should I swap out my mutual funds for lower expense funds or keep them and just use my 20k for new index funds?
Yes. Swap out right away, and buy low-cost ETF's. Only you can speak to your own risk level - I suggest reading
JHCollin's Stock Series for a good read on investing.
I have brokerage accounts (taxable and IRA) at both Fidelity & Vanguard. Both are good choices. The Fidelity equivalent of VTSAX is FSTVX.
The investment order I recommend:
1) Max out your 401K contribution to get the dual benefit of saving
pre-tax dollars, and
reducing taxable income. At a minimum, contribute to your 401K plan to get your employer match - that's FREE money.
2) Max out your HSA account (must have a HDHP to have an HSA account).
http://www.madfientist.com/ultimate-retirement-account/3) Max out a T-IRA or ROTH IRA contribution. A tax-advantaged $5,500/year saving bucket above and beyond the 401K/Roth401K.
4) Invest in a taxable account. You can always invest in a taxable account. Purchase low fee ETF's >> Total Stock Market Fund / Total Bond Market Fund, and/or REIT's if you want a real-estate component to your investment portfolio but don't want to be a landlord (
http://www.mrmoneymustache.com/2011/08/15/become-a-lazy-landlord-with-reits/)
No one tells you that commissions can be waived when buying ETF's in a brokerage account at that company.
Example: in a Vanguard brokerage account, you can buy Vanguard mutual funds with no commission (true of all account types: taxable, IRA, Roth, custodial, etc). Same for Fidelity Funds in a Fidelity brokerage account. The only requirement to wave commissions is you have to hold the ETF in your account for 90+ days. (and you may have to *ASK* about turning this feature on for your account - it's been so long since I did it, I can't remember if that's still true)