Announcement

Collapse
No announcement yet.

Target fund to 3 fund portfolio?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Target fund to 3 fund portfolio?

    Is it worth converting target fund investment to 3 fund portfolio? I have the time and interest in managing my funds.
    I am talking about tax deferred accounts

    I am not sure it is worth paying 5-6K every year and more as portfolio grows. They always lag behind market as well.

    I have to stay with Fidelity and when I looked at options,


    I have FJTKX ( target 2045) for 401(a), expense ratio 0.5, amount close to 750K.
    It is
    US equity: 51.72%
    Non US: 41.25%
    Bonds: 6.91%
    short term debt: 0.12%


    For 3 fund,

    available best options, I see are

    US: FXAIX( Fidelity 500),ER, 0.015%-US Equity
    FSPSX( international, from wallstreet physician's website, no exposure to emerging markets and minimal mid to small cap)- International
    FXNAX for bonds


    403 and 457 has FSNZX, close to 0.65%. amount close to 350K

    options

    FXAIX( as above), and FSKAX ( total market)- US equity
    FSPSX ( as above) or FTIHX( broad exposure) , international
    FXNAX for bonds

    I plan to keep the allocation close to target funds and look at it once a year. I am 42-44 age group,, but plan to stay aggressive, as hopefully pension will be there

    Thank you





  • #2
    Once I was ready to pay attention, I divested from target date funds in my Fidelity tax deferred retirement accounts a couple years ago due to higher expense ratios. It was a great decision as long as you are comfortable with managing your own funds. If you are okay with the allocation in the 2045 target date funds (sometimes they can be conservative and heavier to bonds than some people want), it sounds like a great plan to mirror them with lower expense ratio funds.

    My work retirement account through Fidelity has the option to open a brokerage account inside the 401k. Instead of using the mutual funds that the work organization has chosen, I slide the money over to the brokerage and have a lot more options for funds such as FZROX ( total market index fund with “lost leader”zero expense ratio).

    You may consider investigating to see if the brokerage is an option. It was an option for me all along, but I didn’t take advantage of it until the past few years. Everything is automated to flow into the brokerage into my mutual fund allocations.

    Comment


    • #3
      A three fund portfolio gives you flexibility with your AA that a specific date target fund doesn’t. I like the flexibility.

      Comment


      • #4
        Originally posted by gardener View Post
        Once I was ready to pay attention, I divested from target date funds in my Fidelity tax deferred retirement accounts a couple years ago due to higher expense ratios. It was a great decision as long as you are comfortable with managing your own funds. If you are okay with the allocation in the 2045 target date funds (sometimes they can be conservative and heavier to bonds than some people want), it sounds like a great plan to mirror them with lower expense ratio funds.

        My work retirement account through Fidelity has the option to open a brokerage account inside the 401k. Instead of using the mutual funds that the work organization has chosen, I slide the money over to the brokerage and have a lot more options for funds such as FZROX ( total market index fund with “lost leader”zero expense ratio).

        You may consider investigating to see if the brokerage is an option. It was an option for me all along, but I didn’t take advantage of it until the past few years. Everything is automated to flow into the brokerage into my mutual fund allocations.
        Thank you . After posting this , I learnt that I have the brokerage options in 403 and 457, but not in 401. I cannot contribute money to 401 any more

        So, it is easy decision for 403 and 457, but not a lot of options for 401

        Thank you

        Comment


        • #5
          Finally, I did it today ( after thinking and losing some money over the years to ER). I chose 2 funds instead of 3 .
          StarTrekDoc
          Member
          StarTrekDoc , as I was asking you, I plan to think pension as my bond portfolio). FSKAX ( total market )and FTIHX ( international) in 457/403. In 401 , due to not having FSKAX, will chose FXAIX. Thanks for the replies.

          Comment

          Working...
          X