T.Rowe 401k Question

Investing
#1

Hey all,
I’ve got a quick question regarding a possible change in my 401k investments. My company offers an excellent 401k (150% up to 6%) but up until now the investment options were limited. Mostly the usual high expense ratio TDIF and few low cost index funds.

They just recently offered an option that would open the account up to essentially all available index and mutual funds on the market. I am currently all-in on the US Stock Index fund that’s offered but now with VTSAX on the table, I am thinking it would be best to just shift everything over to that.

What are your guys’ thoughts on this?

Thanks,
Jacob

#2

Hi Jacob - thank you for the question! It sounds like your plan added a brokerage window, which is awesome because that greatly opens up the universe of Mutual Funds and ETFs that you can invest in. I wish more 401k plans would do this.

As you know, VTSAX is Vanguard’s total market U.S. stock index fund. It sounds like you are currently invested in a different U.S. stock index fund? Assuming the one you are currently invested in is low cost, it won’t make too much of a difference between that one and VTSAX. If VTSAX is cheaper or you are more comfortable investing in VTSAX for any reason, then making the switch can make sense.

Keep us posted with any other questions!

Thank you,
Shane

#3

Hi Shane,

Thanks for your response. Correct, they call it a Self-Directed Brokerage account in partnership with Schwab. Which is great since I already have my Roth and brokerage accounts through Schwab.

On the T.Rowe Price 401k site the fund I’m invested in is simply titled U.S. Stock Index. There is no ticket symbol listed. It’s described as following the Russell 3000. It is low cost fortunately (0.03%).

If there likely isn’t going be a noticeable difference between the two, then I’ll just keep my money where it is. It’s nice to have more options now though.

Thanks,
Jacob

#4

Thanks for that background. That makes sense. Yep, what you are currently invested in is VERY similar to VTSAX!

Always keep us posted if we can help!

Shane