401(k) Allocation

[huskie92]

Hi all,

I just popped into my wife's 401k which is run through Empower Retirement. I noticed that every bit of her money is in the Vanguard Target Retirement 2045 Inv. Is this a typical allocation or just a default one that I should look into other options. It says the annual rate of return from when it was opened in 2015 has beet 14.21%. I have attached a screenshot.

They have three options for plan management I see. 1. Let them do it. 2. Let them help me do it. and 3. Let me do it myself. I assume after I finish the WCI course I would be leaning towards option 3. Does anyone have experience with Empower?

Thanks!

[jz]

Vanguard TDs are a fine default.   Vanguard TDs  include up to 40% EM and foreign, which I favor. ERs are low - 0.0014. Once you finish WCI course, you should leave this account AA alone and check back in 30 years.

I have no knowledge of Empower.   Do they charge a fee to you directly, or does her employer eat the fee?

[Peds]

1) def finish the course.

2) Vanguards TDF are the industry standard. also there is no screenshot.

3) the goal is to get to #3.

[DMFA]

huskie92 wrote:

Hi all,

I just popped into my wife’s 401k which is run through Empower Retirement. I noticed that every bit of her money is in the Vanguard Target Retirement 2045 Inv. Is this a typical allocation or just a default one that I should look into other options. It says the annual rate of return from when it was opened in 2015 has beet 14.21%. I have attached a screenshot.

They have three options for plan management I see. 1. Let them do it. 2. Let them help me do it. and 3. Let me do it myself. I assume after I finish the WCI course I would be leaning towards option 3. Does anyone have experience with Empower?

Thanks!

Click to expand...

Look under the hood.

• 90/10 stocks/bonds


• 60/40 US/int'l within stocks


• Expenses 0.16%

Is that what you want? Vanguard thinks it's good enough for the average investor. Does it fit within your goals?

[DMFA]

jz wrote:

Vanguard TDs are a fine default.   Vanguard TDs  include up to 40% EM and foreign, which I favor. ERs are low – 0.0014. Once you finish WCI course, you should leave this account AA alone and check back in 30 years.

I have no knowledge of Empower.   Do they charge a fee to you directly, or does her employer eat the fee?

Click to expand...

...what? Where are you getting those numbers? VTIVX (Vanguard 2045 TDF) is 54% total US stock (of which 20% is extended market, or roughly 11% of total), 36% total int'l stock (of which 16% is emerging markets, or 6% of total), 7% total US bond index, and 3% total int'l bond index.

[jz]

@DMFA, I was citing vanguard TDs in general, not specific for 2045.  Hence, "up to 40%" foreign and EM / total stocks.  You drilled down  more specifically; excellent analysis.

[huskie92]

Thanks for the replies all! It seems like this is a relatively safe allocation at least until I do my due diligence and educate myself more is it not? I am not too familiar with the various minutes of the fund yet so hopefully I will be able to answer you question @dmfa with a bit more time.