What's the difference between these 2 index funds?

Hi! I am enrolling in my company’s 401K plan and am a bit confused on the fund selection.

They offer several Vangaard Index funds (yay!) but the one I think I want to select looks a little different than the one I’m using for my Roth IRA because it has “Instl” added to it - the specific fund I am considering is VIVLX which is Vanguard Instl Trgt Retire 2055 Instl (https://www.morningstar.com/funds/XNAS/VIVLX/quote)

Versus the one I’m familiar with is VTTSX which is a Target Retirement fund for 2060, without the “Instl” added.

My question is - what is that “Instl” part about and is that fund an okay choice to select for my 401K investments?

All of the target date options on my 401K have that on them.

Thank you!

The “Institutional” refers to the share class. The fund in your 401(k) plan (VIVLX) has a slightly lower expense (0.09%). This is a good thing! It normally has a $5M minimum investment. But this applies to the 401(k) plan, not you individually so you can contribute any amount to it. The one you use in your Roth IRA (VTTSX) is meant for individuals and has a $1,000 minimum investment and a 0.15% expense ratio.


Oh yay thank you! Okay great, then looks like I am in good shape there.

Also wanted to ask @ShaneSideris if I have the option to do a 401K, a Roth 401K, or a combo of both do you have any thoughts on which way to go? I have a 4% company match which I believe from reading others posts will apply to the traditional 401K only. But it also seems like Roth is a better long term option if you can swing it (I already have a Roth IRA going too). Was thinking I’d maybe do 5% in each? Or a little more in the Roth 401K?

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The company match should apply to either a Traditional or a Roth. I would double check with your Plan, but most of the time it shouldn’t matter as far as the match is concerned if you contribute to a Roth or Traditional.

There is no right answer to Roth vs Traditional. A lot of people debate this and feel strongly one way or another, but it depends on a number of unknowns (e.g., future tax rates, future income, market returns). Generally, a Roth is better for younger and/or lower income earners and Traditional is likely better if you’re older and haven’t saved much for retirement yet.

In case it is helpful, this post in July provides a good refresher on Roth vs Traditional:


Thank you so much for the insight!! Appreciate the help.


Tori, like @ShaneSideris stated, companies usually match your contributions whether or not you go Roth or traditional 401k. But the company match is usually traditional and this is all accounted for in your 401k by the provider. Pretty standard that matched contributions are traditional whether your contributions are Roth or not.


Excellent point, thank you for mentioning that part! :+1: