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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Uturn on December 18, 2015, 01:10:25 PM

Title: New 401k
Post by: Uturn on December 18, 2015, 01:10:25 PM
I just got my 401k paperwork for the new job, and I think it might suck.

no company match
the only index fund is Spartan Extended Market Index for .07% annual
and if I'm reading this correctly .29% 401k fees
there are 5 pages of other funds listed

My investing prowess doesn't go much farther than "put 401k in VTSAX and taxable in Betterment."  How do I go about finding the best options if Vangaurd is not listed in my options?
Title: Re: New 401k
Post by: Vilgan on December 18, 2015, 01:21:29 PM
29% 401k fees is probably a recordkeeping fee. That's what you pay for administration of the 401k. While higher than normal, its not unusual.

Probably a lot easier to offer thoughts if you provide the entire list of funds available. Extended market is the mid/small cap US companies so you should have a large cap option and something international.
Title: Re: New 401k
Post by: GGNoob on December 18, 2015, 01:25:32 PM
You might just end up doing the Spartan Extended Market Index in your 401k and then do Vanguard S&P 500 and your International funds in your taxable or IRA.

Spartan funds are pretty much just as good as Vanguard and a 0.29% fee on top of the 0.07% is not too horrible for a 401k.
Title: Re: New 401k
Post by: Uturn on December 18, 2015, 07:19:33 PM
I will probably just do the Spartan fund.  2 pages of the offerings are T Rowe Price retire in {year} funds that don't do any better than the index.

I have a question about the %.  I am base plus commission.  How do I calculate the % to get the $18k? Commission is variable, depending on sales.

Or since there is no company match, do I just put in say 30% and stop contributing once $18k it achieved?   

Title: Re: New 401k
Post by: MoonShadow on December 18, 2015, 07:25:54 PM
If there really is no match, just put whatever you would have otherwise into a traditional or Roth IRA; they have much better accounting fees & much broader choices.  What is your age & expected tax bracket?  Do you have access to an HSA?

EDIT: I see that you are 45.  Max out your traditional IRA if there isn't a company match.
Title: Re: New 401k
Post by: acanthurus on December 19, 2015, 07:26:06 AM
Those fees are moderately low for a 401k. I've had small company 401ks that charged a total of 2.05% (all plan fees included) to be in an S&P 500 index . I've also had plans where I could get a midcap index for 0.09% all fees included. It doesn't get (much) lower than that.

If you have a lot of money elsewhere (IRAs or taxable brokerage accounts) then just buy SP500 indexes in those and buy VEXAX in your 401k. Shoot for a 4:1 ratio of SP500 to VEXAX and your total portfolio will behave like VTSAX. Or just find any decent large cap index fund that doesn't cost you a whole lot and call it a day.