Author Topic: Would this allocation work?  (Read 804 times)

MrMike

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Would this allocation work?
« on: August 26, 2016, 09:33:10 AM »
My work 457(b) has crappy options and I thinking of following some advice I've read about having 75% stocks and 25% bonds.  I've been reading "The Simple Path to Wealth" and I really want to get on the right track.  My choices are limited but I'm thinking of doing:

25% Metropolitan West Total Return Bond - MWTIX (http://www.morningstar.com/funds/XNAS/MWTRX/quote.html)

75% Vanguard Institutional Index - VINIX (http://www.morningstar.com/funds/XNAS/VINIX/quote.html)

I will have a solid pension when I retire in about 6 years so I don't really plan on touching the funds unless I need to.

Any thoughts?

MDM

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Re: Would this allocation work?
« Reply #1 on: August 26, 2016, 05:05:42 PM »
VINIX is likely a low fee option (Vanguard charges only 0.04%, but what does the 457b charge?) so that is probably good.

What other 457b options do you have, and what are the fees?

What other pre-tax account options do you have (e.g., 403b or 401k, tIRA) and what are the fees?

See How To: Write a "Case Study" Topic if you want detailed suggestions.

Classical_Liberal

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Re: Would this allocation work?
« Reply #2 on: August 27, 2016, 12:40:23 AM »
Crappy?! VINIX is vanguard's intuitional version of its S&P500 fund.  The fees are even a bit lower than VFIAX!  You literally can't beat it!  Just realize its all large cap, so if you want some smaller cap weight (like VTSAX) you will need a small percentage in something like a Russell 2000, or combo of S&P 400/600.  The bond fund isn't horrific either, looks pretty well diversified with and "OK" 0.66 ER. 

Remember there are advantages to holding certain types of assets in tax deferred accounts, if you don't understand this concept read up or post a case study for members to help.