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403b Investment Choices & Rollover question

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  • 403b Investment Choices & Rollover question

    Hello Forum,

    My wife just transferred jobs. She has $74,841.18 in her account with Fidelity at her old job. When she started contributing to this neither of us knew anything about investing and personal finance so she just closed her eyes and picked. She picked a target fund that is about 95% equities (FNSDX listed below). Our goal now is 100% equities because she is 29 and I am 30 and we plan to retire in 30+ years. We will slowly add bonds to our portfolio. FUN FACT: Her new job is also where I start as an attending in August so these are the same 403 options I will have [She is NOT a physician so no 457 for her].

    Where we can use help is the approach to analyzing our options and which to choose as my method is:

    1. Find lowest expense ratio.

    2. Is it an index fund? Does it say Vanguard in the name?

    3. Click accept

    Probably not the best approach especially as things are only going to get more complex this year as we will be starting to really save for retirement (i.e. maxing out 403b x2, 457, HSA and backdoor Roths +/- taxable brokerage account). I plan to learn a little more about tax effient allocations throughout the year especially in preparation for starting my attending job and having the 2nd 403b and 457 become available to be funded. But for now we have to figure out a few basic things (walk before we run if you will).

    Step #1: What do we do with the fidelity account?
    Our 3 options:

    1. Keep it in Fidelty

    2. Rollover into her new 403b with Prudential

    3. Rollover into IRA (NOT DOING THIS- Will pay >$23k in state and federal taxes on this)

    Step #2: Figure out how to invest in new Prudential 403b as it is our only option while we both work at same hospital.

    Our choices [Cannot view table on phone]:

    Fidelity (Previous Employer)
    Investment Name Symbol Asset Class 10yr ROI Net Exp Ratio Gross Exp Ratio
    Fidelity Freedom 2055 Fund- Class K FNSDX Blend 9.17% 0.64% 0.64%
    T. Rowe Price Blue Chip Growth Fund TRBCX Stock 10.50% 0.72% 0.72%
    American Beacon Small Cap Value AVFIX Stock 9.57% 0.84% 0.84%
    Fidelity Extended Market Index Fund FSEVX Stock 9.28% 0.07% 0.07%
    Fidelity 500 Index Fund- Premium FUSVX Stock 8.47% 0.04% 0.04%
    John Hancock Funds Disciplined JDVWX Stock 8.46% 0.72% 0.72%
    Baron Smal Cap Fund Institutional BSFIX Stock 8.19% 1.06% 1.06%
    Baird Core Plus Bond, Fund Class BCOIX Bond 5.28% 0.30% 0.30%
    Wells Fargo Emerging Markets EMGNX Stock 2.90% 1.19% 1.27%
    Fidelity Diversified International Fund FDIKX Stock 2.35% 0.82% 0.82%
    iShares U.S. Aggregate Bond WFBIX Bond 3.28% 0.05% 0.07%
    Prudential (New Employer)
    Principal Preservation Separate Account 1.68% 0.10% 0.10%
    Metropolitan West Total Return Bd M MWTRX Bond 5.35% 0.67% 0.67%
    Principal High Yield A CPHYX Bond 7.15% 0.91% 0.91%
    Prudential Income Flex Target Balanced Fund Class Z Blend 8.65% 2.10% 2.10%
    Diamond Hill Large Cap A DHLAX Stock 8.02% 0.98% 0.98%
    Oakmark Investor OAKMX Stock 10.44% 0.89% 0.93%
    Vanguard Institutional Index I VINIX Stock 8.30% 0.04% 0.04%
    T. Rowe Price Blue Chip Growth TRBCX Stock 10.48% 0.72% 0.72%
    Jhandcock Disciplined Value Mid Cap R2 JVMSX Stock 11.03% 1.27% 1.27%
    Vanguard Mid Cap Index Admiral VIMAX Stock 8.81% 0.06% 0.06%
    Artisan Mid Cap Institutional APHMX Stock 8.98% 0.95% 0.95%
    Principal MidCap A PEMGX Stock 10.98% 0.99% 0.99%
    Virtus Ceredex Small Cap Value Eq A SASVX Stock 8.80% 1.48% 1.48%
    Gabelli Small Cap Growth A GCASX Stock 9.41% 1.39% 1.39%
    Voya SmallCap Opportunities A NSPAX Stock 9.47% 1.41% 1.41%
    American Funds Europacific Growth R4 REREX Stock 3.35% 0.85% 0.85%
    Oppenheimer Developing Markets A ODMAX Stock 4.10% 1.32% 1.32%
    Cohen & Sters Realty Shares CSRSX Real Estate 7.35% 0.96% 0.96%
    Principal Diversified Real Asset Instl PDRDX Blend 4.09% 0.89% 0.89%

    Our only other retirement account is $22,500 with Vanguard for a Roth IRAs (2017-2018 contributions). It is 50% Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX) and 50% Vanguard Total International Stock Index Fund Admiral Shares (VTIAX).

    Thank you for any input!

  • #2
    you can leave it. fidelity 500 premium is the same as vanguard institutional. you actually get the completion index in your fidelity account as well.

    for prudential would just pick the institutional and move on. the rest of the options arnt great.

    personally i vote against 100:0. extremes in investing usually are unnecessary.


    • #3

      for prudential would just pick the institutional and move on. the rest of the options arnt great.
      Click to expand...

      Yes. This is quite concerning though because Prudential is the only option my wife and I have for our 403b this year and going forward. I do not really know how we should construct our portfolio if these are the only options that we have for our pre-tax. I would assume the options for the 457 will be the same. If I were forced to do this myself, I would likely put 90% of our 403b funds into the VINIX and 10% in VIMAX the re-balance over the next few years so our Roth is 100% VTIAX.

      you can leave it. fidelity 500 premium is the same as vanguard institutional.
      Click to expand...

      Pardon my ignorance, but what is the advantage of keeping it in the Fidelity 500 if that is equivalent to the VINIX?

      personally i vote against 100:0. extremes in investing usually are unnecessary.
      Click to expand...

      Where would you suggest one allocates bonds if they were so inclined to do so? The only decent option I see from above in Fidelity:

      iShares U.S. Aggregate Bond

      Baird Core Plus Bond, Fund Class