How to pick which 401k investment choices when available ones are not named like the ones in the wiki?

[gryphonking]

While I have a very good handle on my personal finances, and I max my 401k contributions, I don't have a good handle on my 401k contribution choices.

I have read the wiki (https://www.reddit.com/r/personalfinance/wiki/401k_funds/) and numerous articles online, but it always just get's confusing.

My issue is that the investment choices I can pick from are not the same as what I read in online articles/wiki. So I'm unsure if they are the same or different?

I kinda feel like doing 100% in a target date fund (like even split between 2050, 2055, and 2060) is the best match for everything I read because they auto change and picking ones that end after I retire will allow me to have high risk ones longer. Or am I wrong?

If it helps/matters, these are my investment choices. I'm 40, married, two kids, one special needs, and looking to retire early if possible.

(spreadsheet version)

Name Asset Class Morningstar Category YTD (Daily) 1 Yr 3 Yr 5 Yr 10 Yr Life of Fund? Expense Ratio
U.S. Large Company Index Fund
Stock
Large Blend
10.42%
30.43%
11.90%
14.76%
12.69%
10.81%
0.0143%

U.S. Large Company Fund
Stock
Large Blend
11.04%
25.78%
7.03%
12.03%
10.76%
10.08%
0.3832%

International Company Index Fund
Stock
Foreign Large Blend
5.93%
14.91%
4.85%
7.11%
4.52%
5.92%
0.0802%

[redacted company name] 2050 Fund
Blend
Target-Date 2050
6.28%
16.64%
4.44%
9.04%
7.50%
6.41%
0.5131%

[redacted company name] 2055 Fund
Blend
Target-Date 2055
6.28%
16.64%
4.44%
9.04%
7.49%
8.30%
0.5131%

[redacted company name] 2060 Fund
Blend
Target-Date 2060
6.28%
16.63%
4.43%
9.02%
--
8.04%
0.5131%

[redacted company name] 2065 Fund
Blend
Target-Date 2065+
6.27%
16.60%
4.39%
--
--
8.04%
0.5131%

[redacted company name] 2045 Fund
Blend
Target-Date 2045
6.11%
16.33%
4.37%
8.99%
7.47%
6.39%
0.5131%

REIT Fund
Stock
Real Estate
-0.51%
4.60%
3.90%
5.00%
6.72%
8.91%
0.4007%

[redacted company name] 2040 Fund
Blend
Target-Date 2040
5.63%
15.38%
3.89%
8.38%
7.16%
6.18%
0.5024%

Private Global Real Estate Fund
Other
Global Real Estate
-2.27%
-7.84%
3.44%
3.44%
6.31%
3.89%
0.6615%

[redacted company name] 2035 Fund
Blend
Target-Date 2035
4.85%
13.76%
3.14%
7.62%
6.69%
5.94%
0.4811%

Money Market Portfolio
Short Term
Money Market-Non-40 Act
1.36%
5.41%
2.67%
2.11%
1.52%
2.98%
0.0847%

International Company Fund
Stock
Foreign Large Blend
5.21%
10.34%
2.37%
6.30%
4.20%
6.27%
0.6054%

[redacted company name] 2030 Fund
Blend
Target-Date 2030
3.98%
12.03%
2.35%
6.77%
6.19%
5.47%
0.4587%

[redacted company name] 2025 Fund
Blend
Target-Date 2025
3.08%
10.27%
1.60%
5.85%
5.40%
4.85%
0.4336%

Retirement Income & Investment Fund
Blend
Target-Date Retirement
2.62%
9.22%
0.98%
4.51%
4.03%
4.27%
0.3982%

Inflation Protected Bond Fund
Bond
Inflation-Protected Bond
0.33%
2.84%
-0.44%
3.05%
--
2.47%
0.1951%

Small Cap Equity Index Fund
Stock
Small Blend
4.71%
10.21%
-0.78%
7.08%
--
7.59%
0.0217%

Intermediate US Bond Fund
Bond
Intermediate Core Bond
0.23%
4.69%
-1.12%
1.75%
--
1.92%
0.1747%

U.S. Small Company Fund
Stock
Small Blend
6.30%
14.56%
-2.76%
10.19%
9.15%
10.83%
0.6525%

US Core Bond Fund
Bond
Intermediate Core Bond
-0.54%
3.58%
-2.97%
0.76%
--
1.26%
0.2740%

US Bond Index Fund
Bond
Intermediate Core Bond
-0.78%
3.30%
-3.19%
0.53%
--
0.99%
0.0365%

[redacted company name] Company Stock Fund
Stock
Communications
13.11%
10.89%
-4.74%
-1.81%
3.18%
8.95%
0.0033%

Emerging Markets Fund
Stock
Diversified Emerging Mkts
0.90%
7.51%
-8.01%
2.57%
2.84%
3.19%
0.6641%

 

[stevenj]

@gryphonking You have essentially every thing you need to make a 3 fund portfolio

Investing guidance: https://www.bogleheads.org/wiki/Three-fund_portfolio https://www.reddit.com/r/personalfinance/wiki/investing

Target date will be easier though

 

[gryphonking]

@stevenj Yeah. Those articles are hella confusing to me. I wish there was some kind of wizard for creating a 3 fund portfolio from a list of available options.

 

[breadandbible]

@gryphonking The basic idea is to bet with the average of the market, rather than take on too much extra risk to try and beat the market. This is done by buying into the entire market with low cost index funds and shifting from stocks to bonds as you age. Simple, diverse, cheap, passive.

From your options, you don't have a US "total market" fund. To mimic that, a combination of mainly US Large-cap Index Fund and a small amount of US Small-cap Index Fund will get you most of the way there. Then, toss in International Index Fund and US Bond Index Fund. Voila, you have a portfolio that mimics a TDF and a 3-fund portfolio! The only thing lacking is international bonds, but that's fine.

An example portfolio using your choices would be:

• 55% US Large-cap Index Fund
• 5% US Small-cap Index Fund
• 30% International Index Fund
• 10% US Bond Index Fund.

You can choose whatever proportions suit your liking and risk tolerance and you can have endless debate over just the choices you have available (add/remove bonds, real estate, etc). Over time, you can adjust the contributions you've made with something called "rebalancing" just as a TDF would. Generally, it's a good idea to check every 3-12 months.

 

[gryphonking]

@breadandbible It's that rebalancing that I wonder about because I know I don't have time to do all that. With various issues in my personal life, I need something more set-it-and-forget-it. Hence why I'm thinking TDF....

 

[sustainableblueberry]

@gryphonking Rebalance once or twice a year. It doesn't have to be all the time.

 

[gryphonking]

@sustainableblueberry I just know that I probably won't have time or I will forget. Like I've been wanting to do this for months but something or the other keeps coming up. Lot's of medical issues in the family. I'm gonna look into this some more this weekend. Hopefully.

 

[thoushaltnorkill]

@gryphonking You can rebalance like once a year just to get back to the ratio you like. If you start investing 55 percent into the Large Cap Index for example, and it grows faster than your other funds, maybe in a year that will have like 58 percent of your balance. So you use the rebalancing feature (usually they make it easy) to get back to the original ratios. The effect of that is that you're selling small amounts of the funds that are up, and buying small amounts of the funds that are down. Buy low sell high!

 

[stevenj]

@gryphonking https://www.bogleheads.org/wiki/Approximating_total_stock_market

 

[only1grace]

@gryphonking Don’t split between multiple target date funds. That’s not necessary. Target date funds are great for the simplicity but they tend to get ultra conservative too early. Putting it all in a 2060 or 2065 would be far enough out that you’d still get some good growth after you retire from work.

The other option would be to go all equities, you’re too young for bonds imo, and build a total market or total market plus intl suite. Or go 100% into that top fund that looks like a cheap SP500 and be done.

 

[breadandbible]

@gryphonking

I kinda feel like doing 100% in a target date fund (like even split between 2050, 2055, and 2060) is the best match for everything I read because they auto change and picking ones that end after I retire will allow me to have high risk ones longer. Or am I wrong?

There's no good reason to split between multiple target date funds. They typically hold the same things, just in different proportions. If you want a lower allocation in bonds, put into a later target date.

As Werewolfdad said, you have everything you need for a 3-fund portfolio. So you can save on the expense ratios of the TDFs, do the work yourself, and fine tune the allocations to your liking. Take a look at the TDFs compared to the Large-cap Index fund: For every $10000, the TDF takes $51.31, but for the index fund it's just $1.43. And I'll bet you that the TDFs have holdings in that very index fund.

 

[gryphonking]

@breadandbible It's that rebalancing that I wonder about because I know I don't have time to do all that. With various issues in my personal life, I need something more set-it-and-forget-it. Hence why I'm thinking TDF....

 

[thoushaltnorkill]

@gryphonking You aren't wrong! TDF funds are set it and forget it. They just have higher fees and over decades the fees make a pretty big difference.

 

[johnnie4jesus]

@gryphonking Sort by expense ratio (small to large), make your picks from the first five to ten on the list. Kinda joking but kinda not…

 

[gryphonking]

@johnnie4jesus But don't you have to balance ER and ROI?

 

[johnnie4jesus]

@gryphonking That’s where the picking comes in. Broad market index funds. Or target funds if you’re risk averse. But if your benefits department did their job right, you’ll find at least one S&P index and one world index in that list. Past performance does not guarantee future results, but you can bet your last dollar that high fees will always cripple your returns.

 

[rhianne]

@gryphonking No. ER and coverage provided matters.

ROI looks at the past, not the future. Tomorrow often doesn't look like yesterday. Take 2010 for example. You'd see that US large cap (VOO) have some of the worst returns, even worse than bonds over the previous 10 years. Emerging would likely have shown as the best. But then things changed and emerging leveled off and US large caps swung into favor.

Edit: Typo