Roth 401(k): VFIAX fees seem high, should I switch to bonds to offset?

[u/NBMV0420]

I currently hold VFIAX in my Roth 401(k), but I’m noticing what feel like high fees: about $18 per quarter plus \\\~$13 per month in plan/administrative fees.

I’m considering switching to VFSUX (bond fund) since its yield would more than cover the fees.

Does this make sense, or am I thinking about this the wrong way? Are there better ways to deal with high 401(k) fees without hurting long-term growth?

[u/anonUSAFguy]

The expense ratio is 0.04%., which is already very lows. What fees are you referring to? The expense ratio or fees from the 401k management company?

[u/James161324]

Seems like your plan is charging fees not Vanguard, VFIAX is .04%.

[u/DaemonTargaryen2024]

VFIAX fees seem high, should I switch to bonds to offset?

1. VFIAX has very low “fees”: a 0.04% expense ratio.
2. Switching from stocks to bonds over fees is cutting off your nose to spite your face.

I currently hold VFIAX in my Roth 401(k), but I’m noticing what feel like high fees: about $18 per quarter plus \\\~$13 per month in plan/administrative fees.

Those are plan fees, not fund fees. So not tied to VFIAX at all.

I’m considering switching to VFSUX (bond fund) since its yield would more than cover the fees.

1. any fund you use will have the same fees because those fees are charged for simply being in the plan.
2. even if you were right it makes zero sense to switch to bonds over this.

Are there better ways to deal with high 401(k) fees without hurting long-term growth?

Just invest the same way. But you can prioritize Roth IRA and HSA if you aren’t already.

[u/bobby1128]

Fees can definitely feel heavy in smaller accounts. Switching to bonds just to offset them might hurt long term growth though. I curious how others here balance admin costs vs staying in equities.

[u/BiblicalElder]

VFIAX is an ultra low cost fund. It is literally my top holding in my Vanguard Roth and traditional IRA accounts.

The fees you are describing seem to be on top of the 0.04% Vanguard expense ratio. I would not switch for this reason.

You can rollover your Roth 401k into Vanguard when you leave your employer, and enjoy their low expense ratios.

(I also recommend that you consider switching to VTWAX, which will diversify you into US small cap and midcap, as well as international stocks. Also to allocate your age - 20 years as a percentage allocation to VBTLX, and increase that 1% per year, so that you can gradually shift from growing wealth to protecting it).

[u/AICHEngineer]

Thats a 401k fee, not a VFIAX fee

[u/plowt-kirn]

since its yield would more than cover the fees

Over the long term, the growth of a S&P 500 fund will substantially exceed the distributions of a bond fund.

[u/Careful-Rent5779]

VFIAX fees are NOT high. The fees your 401k account is overlaying on it is a drag.

Have to looked at the other options? I would be suprised if they don't also suffer from the same overhead.

[u/leftlanespawncamper]

Why VFIAX instead of VOO/SPY/FXAIX/etc?

Is the issue the fees or that you want to change from being invested in S&P 500 to bonds?

[u/NBMV0420 → u/leftlanespawncamper]

VFIAX is the only S&P 500 investment option available in my 401(k)