Starting up my new 401k

17135107686_6a94f6dc1c_zUpon starting my new job, I was excited to get set up for their 401k plan with Prudential. The company match tops out at 3.75%, which is almost double that of my former studio’s meager 2%. Pretty sweet.

The investment options included in the plan were a mystery to me until I could finally log in to the Prudential website about two weeks after my first day of work. As you may have noticed by now, I am no stock picker, which is why I love low-cost indexing. So I was happy to see a Vanguard index fund on the list and nabbed it. I also rummaged around and selected an international and a bond mutual fund, as follows:

  • Vanguard Institutional Index (VINIX) – 60%
  • American Funds Europacific Growth (RERFX) – 20%
  • Metropolitan West Total Return Bond Plan (MWTRX) – 20%

I figured it would be a good idea to balance out all of the U.S. S&P index funds I have here and in my IRA with some international stocks and bonds. RERFX expense ratio is 0.54%, while MWTRX is at 0.62% and neither has a front load (which I learned are BAD from my time with Edward Jones). I think this is a good starting off point and I could always make adjustments later.

My pre-tax contribution is currently set at 15% and paired with the employer match, my weekly total contribution will be about $290. With it being the beginning of May, there are only 34 weeks remaining in 2015, which will bring my total 2015 contributions to right around $10,000. That’s a far cry from the $18,000 maximum for the year, but I want to be sure I keep a solid emergency fund that I can access at any time, so I’ll be beefing up my post-tax savings in the coming months.

Further, I’ve only received one paycheck to date and it didn’t yet have my healthcare premiums and FSA deducted. I’d like to wait another month or so before really dialing those in with my tax withholding (with the advice from my tax accountant) and 401k contributions to be sure I’m taking enough home each week for living expenses and taxable savings goals. It’s all a fine balancing act, right?

(Image: GotCredit)

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