Choosing Investments Under 401(k)


Just as I finished the amazing course, my wife’s employer provided her with a 401(k) plan. The expense ratio of the TDFs are all above 1%, so I’m trying to decide how to invest in the Index Funds they offer (which are all around 0.5%-0.6%). Should I diversify between Large/Mid/Small cap Indexes or go for S&P, International and Bonds Indexes? Or maybe invest everything in the S&P Index Fund?

Btw, all funds are Great-West funds (no idea if it means anything).


Some employers actually partner with a fiduciary financial advising firm to help employees make investment decisions in 401k OR have some educational material to help employees make these decisions. Did you check with your employer if they have such partnering firm or investment guidelines? It’s hard for me to imagine an employer giving employees that many options with no education or help to make investment choices - employees could end up losing a lot of money due to lack of knowledge and the employer could be in trouble because of it. Is there a default investment if you don’t make a selection? Usually, the default option is the best option for you.

Hi Mindi,

The suggestions the financial institution provided was to use “Great-West Lifetime Fund”, which has a 1.03% expense ratio, which is too high according to Jeremy’s course @Jeremy . That is the reason I want to chose one of the indexes they are providing (with a 0.5% expense ration).
@Jeremy does that make sense?


Hi Boaz,
Based on this post (the last image), the next option would be to go for the 3 fund portfolio assuming a low expense ratio. Hopefully that works for you!

Thanks @vivitron ! I guess I’m left with going on the S&P, International and Bonds Indexes, even though their expense ratios are not really good (all between 0.5% to 0.69%).

Is there a total US stock market fund instead of the S&P? Even with a less than ideal expense ratio, you can always look forward to doing a rollover when you leave your job! :stuck_out_tongue:

Not really a total US stock market fund.
Here is the list:

Any thoughts?

Gotcha. I’m assuming you were planning to buy all 3 S&P funds? That’s kind of like DIYing the US stock market fund!

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