401k - Northwestern Mutual

That was the administrator of the plan for a company I worked for several years ago. I can’t recall any deep details about the fees or being overly dissatisfied. But I also don’t recall being sad when the employer switched to Fidelity. I think because the investment offerings were more to my liking. Course, then they dropped Fidelity after a few years and went with another not so great administrator. After I retired last year, I just rolled the balance into my IRA and selected the things that I wanted.

In your wife’s case, if the fees or offerings are very unsatisfactory, best to just invest enough to get the maximum match and pick the least dirty shirts out of what is offered. If and when she moves on or they switch administrators, just roll that plan into a R/O IRA or select better investments in the new administrator’s plan.

Other than making (worthless) complaints to HR, there’s not much she can do IMO.

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I would NOT go with target date

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Target dates are the default allocation at most companies, and it pains me to see so many ill-informed young people wasting their retirement.

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I don’t get the doom and gloom re: Target date funds

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1. Historically, they have ALWAYS underperformed the benchmark S&P. During bull and bear markets. (Look at the charts for yourself if you don’t believe me.)
2. Their expenses are significantly higher than the benchmark S&P index funds.
3. Their dividend is often less than the benchmark S&P index funds.

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Target funds are not SP500 funds

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Of course they aren’t. What’s your point. I’m making a comparison between the 2. Why pay more for less return?

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Because they accomplish different things and provide a hands off risk management approach. I don’t use target date funds but they are great for set it and forget people that aren’t financially literate.

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With all due respect, I hear people say this all the time and it just makes no sense. Do you, or anybody really know what target dates are invested in? Other than 60/40 or 55/45 stock/bond blend? What types of bonds? What stocks specifically? Sure, you can dig and find out, but that’s not easy for a novice investor. So what makes a target date great to set and forget and a great hands off approach? They’re actually MUCH more complex than a standard US index fund.
On the other hand, I know EXACTLY what’s in my Fidelity S&P fund, and I argue that its actually much better to “set and forget for financially illiterate people”

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On the other hand, I know EXACTLY what’s in my Fidelity S&P fund, and I argue that its actually much better to “set and forget for financially illiterate people”

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Yes, that SP500 fund is fine if you want 100% stock exposure forever.

You fail to acknowledge risk management.

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1. Historically, they have ALWAYS underperformed the benchmark S&P. During bull and bear markets. (Look at the charts for yourself if you don’t believe me.)

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So have most funds, not S&P 500 index funds.

However, that is not to say that an allocated portfolio that under performs the S&P 500 is a bad thing for some people.

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Most 401(k) plans are high fee and lacking in good investment choices

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I hear this often…personally, I’ve had great plan options with cheap fund fees from Vanguard and Fidelity. I avoid the DFA, Black Rock, et al with the higher fees.

I think this allocation for anyone under 55 would bode well…

25% growth
20% S&P
20% mid-cap
20% small-cap
15% international

Whatever funds your plan offers, break it down into those segments. I was on the fence with international, but they are highly undervalued right now.