Help with Brand new 401k Plan picking funds

[israelarb]

Hey all, I recently started a new job and am looking at my choices, I'm 25 years old and my company does a weird match% but in the end it caps at $8,000.

I have the means to fully max out my $20,500 and get the $8,000 match.

That said, here's my options:

Target Date Funds - T. Rowe Price Retirement 20XXLarge Cap

FID CONTRAFUND K6

VANG EQUITY INC ADM

VANGUARD INST INDEX

Mid-Cap

VANG EXT MKT IDX INS

VANG SELECTED VALUE

Small Cap

J H TRITON N

International

JPM EMRG MKTS EQ R6

VANG TOT INTL STK IS

Bond Investments

VANG TOT BD MKT INST

WA CORE BOND IS

Short Term Investments

FID GOVT MMKT K6

Thank you for any insights.

 

[yaki]

@israelarb Probably Vanguard Inst. Index if it were me. Especially given your age.

 

[israelarb]

@yaki Nothing else?

 

[resjudicata]

@israelarb 20-40% vg international

 

[hollan]

@israelarb I don't see any benefit in getting a bunch of different index funds. Just pick one good one.

I believe the Vanguard Inst Index is their version of the S&P 500, that's a solid choice.

 

[sonny9313]

@israelarb nothing else

 

[matt5]

@israelarb At your age, that’s basically what a target date fund would put you into anyway. It should have low fees and be diverse. You’ll want to look at rebalancing in a decade or so

 

[israelarb]

Wow I really went too complicated then with this?

https://imgur.com/a/qdxfSfk

 

[sonny9313]

@israelarb all in on this and you won't need to think about it if you're asking the internetz: VANG EQUITY INC ADM

 

[yahwahistheway]

@israelarb Is there an alternate view of these funds for which the stock ticker symbols are available? (Either way, I agree with the various folks above — look for an S&P 500 mutual fund.)

 

[israelarb]

@yahwahistheway Sadly not I have to clikc individually

 

[courtneyr]

@israelarb Not an expert here so please someone correct me if I’m wrong, but OP, you should check out the expense ratios/fees for each of these investment options before making decisions. Though it’s likely the basic mutual funds/ETF’s that track the S+P 500 etc tend to have really low fees.

 

[desertrose81]

@israelarb You are young and have the advantage of time (compounding interest, etc). I’m 44 and if i could turn back time i would, 1) max out IRS annual limit (which you are), and 2) contribute only to a Roth 401k not the traditional (hope your employer offers the Roth). Finally, don’t overthink it, put it in the 2065 Target Date Fund.

 

[whiteladybug]

@israelarb Stick with the funds that start with VANG. There's gold advice here, you can definitely go all in on the large cap fund or include a few different ones (ot actually won't alter your return a crazy amount) but fees matter, and Vanguard as a company has reliably low fees.

 

[ajhnh]

@israelarb If the Target Date funds have a reasonable expense ratio (say less than 0.5%), I would start with those. Then, I would read a book on personal finance such as the Bogleheads Guide to Investing. And from there you can construct your own portfolio with index funds, they’ll save you expenses in the long run.

 

[honestsisterinchrist]

@israelarb 25% Van Inst Ind
25% Van Ext Mkt
25% J H Triton
25% Van Tot Intl

 

[resjudicata]

@israelarb Given your age you want some small cap in there. Small cap is more growth oriented and has outperformed the S&P 500 over long periods. It is much more volatile however and it is an asset class where active could make more sense than using an index fund

 

[israelarb]

@resjudicata What % of mid vs small cap would you say?

 

[hammerlabuk]

@israelarb Keep it simple. Buy the vanguard total market or s&p 500 fund equivalent. 90% In that. And 10% total bond.

 

[mattbrown1022]

@israelarb We are building an application called Merged which will give you the correct recommendations based on your goals. Built with AI fully automated. We can setup a call with you to discuss all the options.