Public Service: Investment Options (403B/457/401k)

[LearningMustachian72]

Hey!  My wife and I have three retirement accounts...

Account 1 (457)
My wife is a school teacher and can contribute the maximum ($19k) to a 457 account in the Vanguard Institutional Index Fund (VINIX) at 0.02% expense ratio. 

Account 2 (403B)
She can also contribute the maximum ($19k) in a 403B plan.  These fees are a bit higher...around 1.5%. 

Account 3 (401k)
I contribute up to the company match 5% as we both rely on my income due to her investments.  I put all my funds in a large cap index fund with a 0.11% expense ratio.

Any advice on how to diversify these three accounts?  Thinking I will keep the 457 and 401k in the large cap indexes (low fees) then diversifying the 403B in mid cap, small cap and bonds.  Keep in mind that the 457 funds can be withdrawn without penalty prior to retirement.  Thoughts/tips?

[seattlecyclone]

With 1.5% fees in your wife's 403(b), why are you maxing that out before your own 401(k) at 0.11%? Those fees are killer. Depending on when she plans to leave the job, the tax advantage to contributing may still outweigh the fees, but you should definitely be maxing out your own low-fee 401(k) before you put cash into that 403(b).

As to diversification between different asset classes, the overall mix is something you need to decide on for yourself based on your own risk tolerance. Do you want 100% stocks? 80%? 60%? Once you make that decision, do the best you can to implement it based on the funds you have available. If the only place you have a cheap bond fund available is in your 401(k), then buy your bond allocation there, and so on.