Author Topic: Work retirement plan - best option?  (Read 1296 times)

rugorak

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Work retirement plan - best option?
« on: December 04, 2016, 05:14:24 AM »
So my employer is going down to just 1 retirement provider and the choices are mostly crap (but thankfully a few decent Vanguard index funds). Ideally like most I would just want VTSAX however that is not available. I do have VFIAX, VIMAX, and VSMAX available. Expense ratios are .05, .08, and .08 respectively. I tried finding a listing of how much overlap there are and it looks like quite a bit (but if you have a great site/tool for finding that out I'll take suggestions as I didn't particularly like any that I found).

So should I just go with VFIAX and call it good or should I put some money into either of those others? I do have all my other retirement investments in VTSAX (so Roth and Rollover IRA's). Thanks in advance.

Rubyvroom

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Re: Work retirement plan - best option?
« Reply #1 on: December 04, 2016, 06:40:26 AM »
If you are looking to approximate the total U.S. stock market, see the attached Bogleheads Wiki. An 81%/4%/15% split of 500 index/mid cap/small cap will get you close. I've had to do something similar with my investments due to a limited fund choice in my employer 401k.

rugorak

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Re: Work retirement plan - best option?
« Reply #2 on: December 05, 2016, 07:27:28 AM »
Thanks. The link to the wiki is great. I also so another that was 82%/18% 500/Small-Cap. But with the expense ratio and not a huge percentage difference what I think I'll do is with my workplace plan on I'll do 100% 500 and then just either push my non-workplace funds into smaller or just leave it in VTSAX and call it good. I think the fees are a bigger deal than the slightly bigger gains I may or may not get.

robartsd

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Re: Work retirement plan - best option?
« Reply #3 on: December 05, 2016, 10:24:49 AM »
VFIAX is a solid choice for a core investment. A 82%/18% split with VSMAX would give more diversity and create a decent large/small barbell to potentially capture some advantages through regular re-balancing.

seattlecyclone

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Re: Work retirement plan - best option?
« Reply #4 on: December 05, 2016, 03:24:32 PM »
If you compare the price history of the S&P 500 funds with VTSAX over the past several years, they basically move in lockstep. In theory the diversification of adding that bottom 20% of mid-cap and small-cap stocks is nice, but in practice it seems not to make much difference at all. Buy VTSAX if it's a reasonable option. If not, sticking with the S&P 500 instead of buying several funds to try to better mimic VTSAX doesn't necessarily seem worth the effort.