In Money

Where I’ve invested my retirement money for now

Going to max out my retirement, and here’s where the money is going and its asset allocation:

Vanguard 500 Index Signal — 45 %

  • MER: 0.6%
  • Return Since Inception: 3.17%

Vanguard Balanced Index Signal — 45%

  • MER: 0.12%
  • Return Since Inception: 5.44%

Selected American Shares D — 5%

  • MER: 0.6%
  • Return Since Inception: 4.47%

Invesco Stable Value — 5%

  • MER: 0.2%
  • Return: 5.39%
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HOW I DECIDED

  1. Betting on the American economy to bounce back — I am very confident here
  2. Looked at MER (management expense ratios) for the cheap ones
  3. Looked at their returns since inception (good range covering the highs & lows of economy)
  4. Looked at the stocks the fund was made up of — big ones, etc
  5. Kept in a moderate risk frame of mind for now — I can always change later

I am interested in returns, but I think just a moderate return is fine for a retirement plan.

I like a “set it and forget it” sort of thing, but I don’t want the expenses of an actively managed fund where they target your retirement date and shift the assets into bonds as you age.

WHAT I MAY DO IN THE FUTURE

Change a few funds. I am going to do more research (it was a quick, 1-hour scan and pick situation), and re-allocate as I see fit.

I am also going to be moving my money over here, so I need to figure out if I want to put my money into the same brokerage, or go with Vanguard directly.

My investing book and tool 

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Sherry of Save. Spend. Splurge.

Millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. Since then, I have paid my $600K home in cash (my half was $300K), my $180K casr in cash, worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

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4 Comments

  1. Amy Nievera

    Funny, I spent two hours this morning researching retirement funds and brokers. I’m still not done. I’ve narrowed it down to a Roth IRA but $5,000 max per year is so tiny! Then again, I contributed less than $5k per year for the past four years. It might be all I can handle for now.

    What other brokers are you considering?

    Reply
    1. Mochi & Macarons

      I am not eligible for the ROTH IRA although I would do that plan in a heartbeat
      I am looking at Vanguard directly, TD Ameritrade, Charles Schwab or Chase….

      Reply
  2. Leigh

    I don’t agree with this statement: “Looked at their returns since inception (good range covering the highs & lows of economy)”

    I think you have stated the expense ratio on the 500 index wrong – admiral shares is 0.06%. That’s *probably* what yours is, not 0.6%.

    On that note, if the expense ratio of Selected American Shares D is really 0.6%, that’s too high.

    Also, it looks like you have some overlap:
    * The 500 Index covers large-cap US stocks.
    * The balanced index is 60/40 in stocks/bonds. It’s probably similar to buying Vanguard Total Stock Market Index and Vanguard Total Bond Market Index in a 60/40 split.
    * Selected Shares American D is also a large-cap US stock fund, but this one is actively managed and with a high expense ratio.
    * The stable value fund sort of overlaps with the bonds, but it probably contains more short-term bonds than TBM would.

    I like stable value funds 🙂 They have reasonable returns and the share price doesn’t fluctuate like bond funds.

    You also don’t have any international stocks. Does your 401(k) not have any? You can always put your taxable money into a good international stock index fund.

    What kind of stock/bond split are you going for?

    Sounds like you’re off to a pretty good start though if you’re planning on maxing it out! The funds selection can always be fidgeted with later, but maxing it out gets harder as the year goes on.

    Reply
    1. Mochi & Macarons

      I always look at the longest range of years in anything and when I mean ‘highs and lows’ I am talking more about the fact that we had a stellar economy before it crashed into a recession in 2009 and are now recovering, so I can take advantage of the upswing.
      I also have overlap because I don’t have the full range of funds available in my plan and the others didn’t look good. Even the international ones were too European for me.
      I copied the exact MER in my fund so that’s the percentage shown to me.
      I don’t really invest in bonds with my 401K I may do that outside of my 401K. I will have money stored somewhere there but I need to move my money first.
      I am trying to hunt down a good Brazilian Index fund right now

      Reply

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