Getting started late. Appreciate any help.

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Topic Author
CluelessinNJ
Posts: 3
Joined: Sun Oct 24, 2021 4:36 pm

Getting started late. Appreciate any help.

Post by CluelessinNJ »

Emergency funds: Yes, have a 3mo EF

Debt:
Credit card: paid in full monthly
Car loan: $5,500 @ 4.7% (spouse will need new car soon so will most likely be adding a car payment)
Student Loan: $75k @ approx 6% (still held by USDofE so various rates) I pay the minimum and do not see this as debt as I truly do not care if I die owing the money
Rent: $600/mo

Tax Filing Status: Married Filing Jointly

Tax Rate: 12% Federal, 3.5% State

State of Residence: NJ

Age:48

Desired Asset allocation: no idea. My username tells the tale.

Please provide an approximate size of your total portfolio: 25k


Current retirement assets

Taxable
? cash (for investing – do not include emergency funds) Could pull maybe $50-100/wk from pay

401k - entire account is approx 40% of total retirement money. This is the breakdown they sent me for this account:
5% specialty
27% intl stocks
4% small cap stocks
6% mid cap stock
38% lg cap stock
13% bonds
6% other
Company match: 100% first 3%, 50% next 2%

Roth IRA at eTrade
55% individual stocks at the moment

Traditional IRA at eTrade
1% cash at the moment

HSA at HealthEquity
5% cash - not an employer plan, self-funded
_______________________________________________________________
Note: Total percentage of all the above accounts together (not each account individually) should equal 100%.

Contributions

New annual Contributions
12% of gross to 401k (+4% employer match) - approx $10k/year
$1k HSA
$0 Roth IRA
$0 taxable (for retirement, not short term goals)

Questions:
1. If I have cash to "save" for retirement, what is the best place for it? Roth, Traditional IRA, 401k, HSA, life insurance?

1a. Someone recommended that I possibly stop contributing more than the 5% my employer will match to 401k and put that money elsewhere. Is this best and if so where is better? I'm getting a very late start and just started working for the company that offers a retirement account 12 months ago. I admit that I am leery about being responsible for transferring funds every payday. I like that the 401k Contributions are automatically deducted and I don't have to worry about it.

2. Do you recommend a financial advisor? I know to look for a fee-based advisor, but I suspect I don't have enough to make it worth their time.

3. Do you ever recommend whole life or similar as an investment/part of your retirement plan? Again I had someone tell me there is a product that combines part term and part whole life and is more affordable?

Thank you very much for your insight.

ETA: Yes, I am using my employer's High Deductible health plan now. I have had the HSA savings account from years ago when I was eligible then went through years where I wasnt eligible to contribute because I didn't have an HSA health plan. I have added $500 to it so far this year.

What are the actual names of the mutual funds that you hold in your 401k? And what is the expense ratio for each fund? Do you pay any kind of management fee on top of the expense ratio(s)?

I will type out exactly what my recent statement says.... I dearly wish they had provided ticker symbols!

fund/ allocation %/expense ratio
Specialty:
Blkrk strat Inc oppr I / 1%/.76
Pimcocomdyrealrtnstratinst/ 2%/.99
Prncpl Glbl Realest R6/ 2%/.88

International Stocks:
Dfa Emrg Mkt Cor Eq Inst/7%/.39
Dodgecox Intl Stk/7%/.63
Fid Intl Index/6%/.04
Gdmnscs Gqgptnrintloppr R6/7%/.81

Small Cap Stocks:
Avnts Us Smcap Val Inst/2%/.25
Vngd Explr Adml/2%/.30

Mid Cap Stocks:
Blkrk Mdcap Gr Eq Inst/3%/.85
Diamond Hill Mdcap I/3%/.78

Large Cap Stocks:
Col Sel Lgcap Gr Instructional/6%/.77
Dfa us lgcap Val Inst/7%/.32
Fid 500 Indx/13%/.02
Jpm Eq Inc R5/7%/.58
Nw Loomis Allcap Gr R6/6%/.89

Bonds:
Ab Glbl Bd I/2%/.55
Blkrk HI Yd Bd Port K/3%/.52
Fid US Bd Index/3%/.03
Pgim Ttl Rtn Bd R6/3%/.41
Pimco Real Rtn Inst/2%/.47

Other:
Nw Fxd Scl Optn/6%/? I don't see this one

Administrative Expenses $0
Advisory Service Provider Fee $4.92

(3) What are all the available fund options in your 401k plan? (NOT including those listed above already in my portfolio)
FUND GROSS EXP RATIO
Balanced:
VBIAX .07
VTXVX .12
VTWNX .13
VTTVX .13
VTHRX .14
VTTHX .14
VFORX .14
VTIVX .15
VFIFX .15
VFFVX .15
VTTSX .15
VTINX .12
VWIAX .16

Bonds:
VSIGX .07
VBTLX .05

International Stocks:
HAIGX .91
VEMAX .14
VTIAX .11

Large Cap Stocks:
VIGAX .05
VTSAX .04

Mid cap stocks:
VMGMX .07
VASVX .31

Small cap stocks:
DFFVX .33
VSMAX .05

Specialty:
DFGEX .34
Last edited by CluelessinNJ on Wed Oct 27, 2021 10:44 am, edited 2 times in total.
User avatar
Beensabu
Posts: 5657
Joined: Sun Aug 14, 2016 3:22 pm

Re: Getting started late. Appreciate any help.

Post by Beensabu »

(1) This stuff is worth reading through to get started on figuring out your personal asset allocation that you feel most comfortable with:

Asset Allocation: https://www.bogleheads.org/wiki/Categor ... allocation

Portfolio Risk Management: https://www.bogleheads.org/wiki/Categor ... management

(2) What are the actual names of the mutual funds that you hold in your 401k? And what is the expense ratio for each fund? Even if it's just one "all-in-one-fund", still tell people the name and expense ratio. Do you pay any kind of management fee on top of the expense ratio(s)?

(3) What are all the available fund options in your 401k plan? It will help people help you if you list all the fund names along with their ticker symbols and expense ratios.

(4) You probably want to read this on prioritizing investments. If you're eligible for Roth contributions, you might want to think about filling as much of that annually as possible. You can do it all at once (or in big chunks every 3 months). You can also set up automatic contributions from your checking account to your Roth (just make sure you don't go over the contribution limit for the tax year).
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
User avatar
Wiggums
Posts: 7051
Joined: Thu Jan 31, 2019 7:02 am

Re: Getting started late. Appreciate any help.

Post by Wiggums »

Insurance is not an investment.

You have too many funds for a portfolio of 25k. Did I read that right?

You need to save as much as possible because time in the market And your savings rate make the most difference right now.

You don’t need an advisor at this point.

We do automatic investing outside of the 401(k). You can set up the same automatic transfer at Vanguard and Fidelity, for example.
"I started with nothing and I still have most of it left."
User avatar
ruralavalon
Posts: 26353
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Getting started late. Appreciate any help.

Post by ruralavalon »

Welcome to the forum :) .

More information is needed to answer your questions.

Could you please list all of the funds offered in the 401k, giving fund names, tickers if any, and expense ratios? Please see this for information needed and format: "Asking Portfolio Questions".

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all your information is in one place.


CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm Emergency funds: Yes, have a 3mo EF

Debt:
Credit card: paid in full monthly
Car loan: $5,500 @ 4.7% (spouse will need new car soon so will most likely be adding a car payment)
Student Loan: $75k @ approx 6% (still held by USDofE so various rates) I pay the minimum and do not see this as debt as I truly do not care if I die owing the money
Huh???

Find a way not to buy a new car.


CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pmRent: $600/mo

Tax Filing Status: Married Filing Jointly

Tax Rate: 12% Federal, 3.5% State

State of Residence: NJ

Age:48

Desired Asset allocation: no idea. My username tells the tale.
I suggest about 20% in bonds or other fixed income investments (like CDs, savings accounts, Stable Value Fund, money market fund). This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see:
1) Wiki article Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk";
2) Wiki article, "Asset allocation";
3) Morningstar (8/20/2019), "The Best Diversifiers for Your Equity Portfolio", link;
4) Morningstar (4/8/2020), "What's the Best Diversifier for Stocks?", link;
5) White Coat Investor (9/23/2016), "In Defense of Bonds", link;
6) Ben Carlson (8/2/2020), "Why Would Anyone Own Bonds Right Now?", link; and
7) Morningstar (4/13/2021), "Which Bonds Provide the Biggest Diversification Benefits?", link.

I suggest around 20 - 30% of stocks in international stocks. Vanguard paper (March 2012), "Considerations for investing in non-U.S. equities", available as an archived pdf. Historically, allocating 20% of an equity portfolio to non-U.S. stocks would have captured about 84% of the maximum possible diversification benefit, and allocating 30% of an equity portfolio to non-U.S. stocks would have captured about 99% of the maximum possible diversification benefit (p. 6). The diversification benefit has varied over time. (You can find lots of debate here on international allocation, opinions ranging all the way from 00% to 50% of stocks in international stocks. If you want more viewpoints on international stocks please try the Google search box, upper right, this page).

That works out to about 20% bonds, 20% international stocks, and 60% domestic stocks. Asset allocation is a very personal decision. You must decide on an allocation that is comfortable for you based on your own ability, willingness and need to take risk.



CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pmPlease provide an approximate size of your total portfolio: 25k


Current retirement assets :idea:

Taxable
? cash (for investing – do not include emergency funds) Could pull maybe $50-100/wk from pay
This annual $2.6k - $5.2k would be better invested in a tax-advantaged account.


CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm401k - entire account is approx 40% of total retirement money. This is the breakdown they sent me for this account:
5% specialty
27% intl stocks
4% small cap stocks
6% mid cap stock
38% lg cap stock
13% bonds
6% other
Company match: 100% first 3%, 50% next 2%

Roth IRA at eTrade
55% individual stocks at the moment

Traditional IRA at eTrade
1% cash at the moment

HSA at HealthEquity
5% cash - not an employer plan, self-funded
_______________________________________________________________
Note: Total percentage of all the :?: above accounts together (not each account individually) should equal 100%.
Could you please list all of the funds offered in the 401k, giving fund names, tickers if any, and expense ratios? Please see this for information needed and format: "Asking Portfolio Questions".

Please simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot if all your information is in one place.

Here is a general account funding priority that usually works well for many people (when there is no high interest debt):
1) Contribute to the work-based plans (401k, 403b, 457, SIMPLE IRA, TSP, etc.) enough to get the full employer match (the match is like free money, your best possible investment);
2) Contribute the maximum to an IRA, traditional or Roth (or backdoor Roth technique), depending on eligibility and personal circumstances;
3) Contribute the remainder of the maximum employee contribution to the work-based accounts; and
4) Contribute to a taxable investing account.

"If the company plan offers good, low-cost funds, it may be preferable to contribute to the company plan before contributing to an IRA." Please see the wiki article "Prioritizing investments", link.

In your Roth IRA at E*Trade (for better diversification) I suggest switching the existing balances from the individual stocks to Vanguard Total Stock Market ETF (VTI) ER 0.03%.

Does your employer offer a High Deductible Health Plan (HDHP) at work? If so do you in use that plan?



CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pmContributions

New annual Contributions
12% of gross to 401k (+4% employer match) - approx $10k/year
$1k HSA
$0 Roth IRA
$0 taxable (for retirement, not short term goals)
The annual $2.6k - $5.2k cash pulled from pay would be better invested in a tax-advantaged account.


When "getting started late" the most important investing decision you can make is to establish a high rate of contributions. "Savings rate is the most important retirement savings decision, not only because of the math but because of the way it drives your financial mindset and habits. The basic raw stock/bond risk decision comes second. And the finer details--index or active, factors or total market, alts or no alts--are a distant third." Forum discussion on Jonathan Clements’ article "Show me the Money".

At age 48 the maximum annual employee contribution limit for a 401k is $19.5k. The employer match does not count towards the employee limit, it's extra.

At age 48 the maximum annual contribution to an IRA is $6k.




CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pmQuestions:
1. If I have cash to "save" for retirement, what is the best place for it? Roth, Traditional IRA, 401k, HSA, life insurance?
If good funds with low expense ratios are offered in your employer's 401k plan then maximizing 401k contributions will be the best choice.

As you noted "401k Contributions are automatically deducted and I don't have to worry about it", which makes it easier to maintain savings discipline.

Life insurance is the worst investing choice.


CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm1a. Someone recommended that I possibly stop contributing more than the 5% my employer will match to 401k and put that money elsewhere. Is this best and if so where is better? I'm getting a very late start and just started working for the company that offers a retirement account 12 months ago. I admit that I am leery about being responsible for transferring funds every payday. I like that the 401k Contributions are automatically deducted and I don't have to worry about it.
"If the company plan offers good, low-cost funds, it may be preferable to contribute to the company plan before contributing to an IRA." Please see the wiki article "Prioritizing investments", link.



CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm2. Do you recommend a financial advisor? I know to look for a fee-based advisor, but I suspect I don't have enough to make it worth their time.
A quick education for a beginning investor is Dr. Bernstein's short pdf book, "If You Can". Also take a look at the Boglehead’s wiki, the "Bogleheads’ investment philosophy" link I give below.

To go beyond the most basic I suggest that you also read one or two more books on investing. Wiki article, "Books: recommendations and reviews".


CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm3. Do you ever recommend whole life or similar as an investment/part of your retirement plan? Again I had someone tell me there is a product that combines part term and part whole life and is more affordable?
No, do not use whole life as an investment. No, do not use the combination "part term and part whole life" (Universal Life??) either, forum discussion. "You're right that whole and universal policies act as both an investment and as life insurance, but they aren't very good at either."

Debunking the Myths of Whole Life Insurance.

For life insurance use only low cost term insurance.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Topic Author
CluelessinNJ
Posts: 3
Joined: Sun Oct 24, 2021 4:36 pm

Re: Getting started late. Appreciate any help.

Post by CluelessinNJ »

Thank you all for your replies. I have added some information to my original post.

I chose to have my plan overseen by someone but I am guessing that I should call and request to change my account to "self-directed" as many of these expense ratios are ugly.
User avatar
Stinky
Posts: 14155
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Getting started late. Appreciate any help.

Post by Stinky »

CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm
3. Do you ever recommend whole life or similar as an investment/part of your retirement plan? Again I had someone tell me there is a product that combines part term and part whole life and is more affordable?
Welcome to the Forum!

No, no, 1000 times no. I would never suggest whole life (or any other "permanent" life insurance product like universal life or variable life) as an investment part of a retirement plan. Nor would I suggest such a product outside of a retirement plan.

If you need life insurance (that is, if someone like a minor child or a spouse is dependent on your income for their support), purchase level term life insurance to cover your insurance needs. You can check coverages and prices at a site like term4sale.com or zander.com.

Do NOT mix investing and life insurance.
Retired life insurance company financial executive who sincerely believes that ”It’s a GREAT day to be alive!”
babystep
Posts: 775
Joined: Tue Apr 09, 2019 9:44 am

Re: Getting started late. Appreciate any help.

Post by babystep »

CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm Emergency funds: Yes, have a 3mo EF

Debt:
Credit card: paid in full monthly
Car loan: $5,500 @ 4.7% (spouse will need new car soon so will most likely be adding a car payment)
Student Loan: $75k @ approx 6% (still held by USDofE so various rates) I pay the minimum and do not see this as debt as I truly do not care if I die owing the money
Rent: $600/mo

Tax Filing Status: Married Filing Jointly

Tax Rate: 12% Federal, 3.5% State

State of Residence: NJ

Age:48

Desired Asset allocation: no idea. My username tells the tale.

Please provide an approximate size of your total portfolio: 25k


Current retirement assets

Taxable
? cash (for investing – do not include emergency funds) Could pull maybe $50-100/wk from pay

401k - entire account is approx 40% of total retirement money. This is the breakdown they sent me for this account:
5% specialty
27% intl stocks
4% small cap stocks
6% mid cap stock
38% lg cap stock
13% bonds
6% other
Company match: 100% first 3%, 50% next 2%

Roth IRA at eTrade
55% individual stocks at the moment

Traditional IRA at eTrade
1% cash at the moment

HSA at HealthEquity
5% cash - not an employer plan, self-funded
_______________________________________________________________
Note: Total percentage of all the above accounts together (not each account individually) should equal 100%.

Contributions

New annual Contributions
12% of gross to 401k (+4% employer match) - approx $10k/year
$1k HSA
$0 Roth IRA
$0 taxable (for retirement, not short term goals)

Questions:
1. If I have cash to "save" for retirement, what is the best place for it? Roth, Traditional IRA, 401k, HSA, life insurance?

1a. Someone recommended that I possibly stop contributing more than the 5% my employer will match to 401k and put that money elsewhere. Is this best and if so where is better? I'm getting a very late start and just started working for the company that offers a retirement account 12 months ago. I admit that I am leery about being responsible for transferring funds every payday. I like that the 401k Contributions are automatically deducted and I don't have to worry about it.

2. Do you recommend a financial advisor? I know to look for a fee-based advisor, but I suspect I don't have enough to make it worth their time.

3. Do you ever recommend whole life or similar as an investment/part of your retirement plan? Again I had someone tell me there is a product that combines part term and part whole life and is more affordable?

Thank you very much for your insight.

ETA: Yes, I am using my employer's High Deductible health plan now. I have had the HSA savings account from years ago when I was eligible then went through years where I wasnt eligible to contribute because I didn't have an HSA health plan. I have added $500 to it so far this year.

What are the actual names of the mutual funds that you hold in your 401k? And what is the expense ratio for each fund? Do you pay any kind of management fee on top of the expense ratio(s)?

I will type out exactly what my recent statement says.... I dearly wish they had provided ticker symbols!

fund/ allocation %/expense ratio
Specialty:
Blkrk strat Inc oppr I / 1%/.76
Pimcocomdyrealrtnstratinst/ 2%/.99
Prncpl Glbl Realest R6/ 2%/.88

International Stocks:
Dfa Emrg Mkt Cor Eq Inst/7%/.39
Dodgecox Intl Stk/7%/.63
Fid Intl Index/6%/.04
Gdmnscs Gqgptnrintloppr R6/7%/.81

Small Cap Stocks:
Avnts Us Smcap Val Inst/2%/.25
Vngd Explr Adml/2%/.30

Mid Cap Stocks:
Blkrk Mdcap Gr Eq Inst/3%/.85
Diamond Hill Mdcap I/3%/.78

Large Cap Stocks:
Col Sel Lgcap Gr Instructional/6%/.77
Dfa us lgcap Val Inst/7%/.32
Fid 500 Indx/13%/.02
Jpm Eq Inc R5/7%/.58
Nw Loomis Allcap Gr R6/6%/.89

Bonds:
Ab Glbl Bd I/2%/.55
Blkrk HI Yd Bd Port K/3%/.52
Fid US Bd Index/3%/.03
Pgim Ttl Rtn Bd R6/3%/.41
Pimco Real Rtn Inst/2%/.47

Other:
Nw Fxd Scl Optn/6%/? I don't see this one

Administrative Expenses $0
Advisory Service Provider Fee $4.92

(3) What are all the available fund options in your 401k plan? I will work on finding this information.
CluelessinNJ,

We can't do anything about the past but history can provide us good learning for future. We are missing the background story which may or may not be critical to provide the help. Please share why do you have only 25k saved at this age?

It can be very simple.

Savings = Income - Expenses.

Do you need to reduce expenses?
Do you need to increase income?
Sam_957
Posts: 164
Joined: Tue Oct 27, 2020 7:04 pm
Location: USA

Re: Getting started late. Appreciate any help.

Post by Sam_957 »

If you let that loan go for 20 years you’ll pay about 75k in interest plus the loan amount. :shock:
My other vehicle is an index fund.
heyyou
Posts: 4461
Joined: Tue Feb 20, 2007 3:58 pm

Re: Getting started late. Appreciate any help.

Post by heyyou »

Decide that you have good enough housing, and good enough cars, and good enough things, so you do not need to buy any more of them. Give up thinking that your image seen by others, is more important than you saving money for future problems and for your retirement. Morgan Housel, a financial writer, wrote "The quickest way to have less money is to spend money to show others that you have money." Look for old people who have to work just to have groceries in retirement, and decide that you do not want to be like them, so you will save money from now on.

Read Consumer Reports magazine to learn about reliable used cars, and buy one of them instead of new cars that depreciate a thousand dollars on the first day you own them, and thousands of more dollars in the first year that you own them. Find a good car repair shop instead of a good new car salesperson. Many posters here are stealthy millionaires who drive plain, older but reliable cars.

I second the suggestion about paying for only term life insurance. Read about the commissions paid to the sellers of whole life insurance, often almost all of the first year's premium. Those whole life policies are based on using confusing terms to extract more money from you that goes to the sales staff and the insurance company, not to your heirs if you die.
User avatar
peetsperk
Posts: 372
Joined: Wed Feb 04, 2015 3:02 pm

Re: Getting started late. Appreciate any help.

Post by peetsperk »

Welcome to the forum. A few suggestions. First read The Total Money Makeover by Dave Ramsey. The lessons he teaches regarding debt and saving will help you make much greater progress in a shorter period of time. Attending his Financial Peace University class is well worth the $129 and you'll meet others working hard to super-charge their savings for retirement. One caution - tear the chapter on investing out of Dave's book and toss it. Instead, read Jack Bogle's The Little Book of Common Sense Investing. It will both inform and inspire. And whatever you do, don't buy that new car. That's the type of thinking that got you in your current situation. Good luck. You can do this.
h82goslw
Posts: 493
Joined: Fri Jun 17, 2016 5:44 am

Re: Getting started late. Appreciate any help.

Post by h82goslw »

peetsperk wrote: Tue Oct 26, 2021 12:48 am Welcome to the forum. A few suggestions. First read The Total Money Makeover by Dave Ramsey. The lessons he teaches regarding debt and saving will help you make much greater progress in a shorter period of time. Attending his Financial Peace University class is well worth the $129 and you'll meet others working hard to super-charge their savings for retirement. One caution - tear the chapter on investing out of Dave's book and toss it. Instead, read Jack Bogle's The Little Book of Common Sense Investing. It will both inform and inspire. And whatever you do, don't buy that new car. That's the type of thinking that got you in your current situation. Good luck. You can do this.
This
User avatar
ruralavalon
Posts: 26353
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Getting started late. Appreciate any help.

Post by ruralavalon »

CluelessinNJ wrote: Mon Oct 25, 2021 6:06 pm Thank you all for your replies. I have added some information to my original post.

I chose to have my plan overseen by someone but I am guessing that I should call and request to change my account to "self-directed" as many of these expense ratios are ugly.
Yes, avoid management expenses and higher expense ratios whenever possible.


CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pmETA: Yes, I am using my employer's High Deductible health plan now. I have had the HSA savings account from years ago when I was eligible then went through years where I wasnt eligible to contribute because I didn't have an HSA health plan. I have added $500 to it so far this year.

What are the actual names of the mutual funds that you hold in your 401k? And what is the expense ratio for each fund? Do you pay any kind of management fee on top of the expense ratio(s)?

I will type out exactly what my recent statement says.... I dearly wish they had provided ticker symbols!
With no ticker symbols, these are probably Collective Investment Trusts (CITs) rather than mutual funds. Wiki article, "Collective Investment Trusts" .

In your 401k materials or on the 401k website there will be a short fact sheet for each fund which states -- (1) the name of the company managing the fund (like Vanguard, BlackRock, State Street, Fidelity, etc.), (2) the expense ratio, (3) the index tracked by the fund, and (4) a comparison of fund performance to the index.



CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pmfund/ allocation %/expense ratio
Specialty:
Blkrk strat Inc oppr I / 1%/.76
Pimcocomdyrealrtnstratinst/ 2%/.99
Prncpl Glbl Realest R6/ 2%/.88

International Stocks:
Dfa Emrg Mkt Cor Eq Inst/7%/.39
Dodgecox Intl Stk/7%/.63
Fid Intl Index/6%/.04
Gdmnscs Gqgptnrintloppr R6/7%/.81

Small Cap Stocks:
Avnts Us Smcap Val Inst/2%/.25
Vngd Explr Adml/2%/.30

Mid Cap Stocks:
Blkrk Mdcap Gr Eq Inst/3%/.85
Diamond Hill Mdcap I/3%/.78

Large Cap Stocks:
Col Sel Lgcap Gr Instructional/6%/.77
Dfa us lgcap Val Inst/7%/.32
Fid 500 Indx/13%/.02
Jpm Eq Inc R5/7%/.58
Nw Loomis Allcap Gr R6/6%/.89

Bonds:
Ab Glbl Bd I/2%/.55
Blkrk HI Yd Bd Port K/3%/.52
Fid US Bd Index/3%/.03
Pgim Ttl Rtn Bd R6/3%/.41
Pimco Real Rtn Inst/2%/.47

Other:
Nw Fxd Scl Optn/6%/? I don't see this one

Administrative Expenses $0
Advisory Service Provider Fee $4.92
In selecting funds strive for a combination of both broad diversification (to reduce risk) and low expense ratios (to increase your net return). To simply and easily achieve those two goals I suggest choosing funds to simulate the very well diversified, low expense ratio "three-fund portfolio". Please see:
1) Wiki article "Three-fund portfolio";
2) Forum discussion, "The Three-Fund Portfolio"; and
3) Taylor Larimore post, "Articles recommending the three-fund portfolio".

"If the company plan offers good, low-cost funds, it may be preferable to contribute to the company plan before contributing to an IRA." Please see the wiki article "Prioritizing investments", link.

Your employer's plan does offer some good, very diversified, index funds with very low expense ratios. I suggest that you prioritize contributions to the 401k over contributions to any other account. At age 48 the maximum annual employee contribution limit for a 401k is $19.5k. As you noted "401k Contributions are automatically deducted and I don't have to worry about it", which makes it easier to maintain savings discipline. The employer match does not count towards the employee limit, it's extra.

In my opinion these are the funds to consider using in your 401k account:
1) Fidelity 500 Index Fund (80% of U.S. stock market) ER 0.02%:
2) Fidelity International Index Fund (developed markets only) ER 0.04%" and
3) Fidelity US Bond Index Fund (a total bond market index fund) ER 0.03%.

For domestic stocks I suggest using a total stock market index fund where available. "In a 401(k) plan with limited choices one might very well opt for an S&P 500 index fund to serve as the domestic stock component of a three-fund portfolio." Wiki article, Three-fund portfolio, "Other considerations".

In my opinion in a plan that lacks a total stock market index fund, a S&P 500 index fund is good enough by itself for a domestic stock allocation. A S&P 500 index fund covers over 80% of the U.S. stock market investing in stocks of selected large-cap and mid-cap U.S. companies. In the 29 years since the creation of the first total stock market index fund the performance of the two types of funds has been almost identical. Portfolio Visualizer, 1993-2021. So it seems that adding a little in mid/small cap stocks trying to mimic the holdings of a total stock market fund has historically made little difference in performance.

See also:
1) Allan Roth, CBS Moneywatch (02/03/2010), "John C. Bogle on the S&P 500 vs. the Total Stock Market"; and
2) Wall Street Physician (01/17/2019), "Should You Invest in the S&P 500 or the Total Stock Market?".



CluelessinNJ wrote: Sun Oct 24, 2021 6:01 pm(3) What are all the available fund options in your 401k plan? I will work on finding this information.
Just in case there are more diversified index funds offered, like a total stock market index fund and a total international stock index fund.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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CluelessinNJ
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Joined: Sun Oct 24, 2021 4:36 pm

Re: Getting started late. Appreciate any help.

Post by CluelessinNJ »

All available fund options have been added to OP. Thank you all once again for your help.
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ruralavalon
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Location: Illinois

Re: Getting started late. Appreciate any help.

Post by ruralavalon »

CluelessinNJ wrote: Wed Oct 27, 2021 10:46 am All available fund options have been added to OP. Thank you all once again for your help.
Your employer's 401k plan offers many excellent, very diversified, index funds with very low expense ratios. You are fortunate.

With the new list of fund options, I suggest using these three in your 401k account for a little better diversification:
1) Vanguard Total Stock Market Index Fund (VTSAX) ER 0.04%;
2) Vanguard Total International Stock Index Fund (VTIAX) ER 0.11%; and
3) Vanguard Total Bond Market Index Fund (VBTLX) ER 0.05%.

I agree with the others who have suggested avoiding any further debt such as for a new car, and cutting spending as much as possible to enable increased contributions to your 401k account.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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