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I like to have a simple approach to my 401k savings (I'm currently 32). I either want to invest in some low cost index funds, or in a low cost target retirement date fund.

I've have my IRAs and one of my 401ks in Vanguard's 2045 fund. This seems like a pretty good fund -- it holds a total stock market index, a total international index, and a total bond index. The expense ratio is .18%, which is slightly higher than holding the component funds but not by much.

My current employers 401k is a bit unusual. They've paid some financial manager to create company branded funds for them, and this is the bulk of what's available in the plan. They do offer a set of target date funds, but with a .55% expense ratio. These plans are all underperforming their benchmarks, which makes sense since they're basically the same as all the others but with larger expenses for no particular reason.

So .55% isn't awful but it's also kind of pointlessly high and that will compound quite a bit over the years.

There are 4 other index funds. A total bond index, a total international index, a large cap index, and a mid/small cap index.

So I thought I could simulate the target date funds and just rebalance each year. The only hitch here is that the large and mid/small index funds overlap. The large is Russel 1000, and the mid/small is Russell 2500. That means the 500-1000th largest firms in the Russell index are in both funds.

So my options are to go with the easy fund at .55% expense or do my own thing with the small selection of other options at about .07% expense, but with double the investment in narrow slice of the market.

Any opinions?
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