Vanguard Total Stock Market Index Fund (VTI) is a low-cost, broadly diversified index fund that provides exposure to the entire U.S. stock market. It is one of the most popular 401(k) investments due to its low expense ratio, broad diversification, and long-term track record of performance.
VTI tracks the performance of the CRSP US Large Cap Total Market index, which includes over 3500 U.S. stocks of all sizes. This broad diversification helps to reduce the risk of any one company or sector having a negative impact on the fund’s performance.
VTI has an expense ratio of just 0.04%, making it one of the lowest-cost index funds available. This means that more of your 401(k) contributions will go towards investments, and less will be lost to fees.
Over the long term, VTI has outperformed the majority of actively managed funds. In the 10 years ending December 2022, VTI returned an annualized 10.1%, compared to 9.5% for the average actively managed fund.
Of course, no investment is without risk. The value of VTI can fluctuate with the overall stock market, and there is no guarantee that it will continue to perform well in the future. However, for investors with a long-term investment horizon, VTI is a solid choice for a low-cost, diversified 401(k) investment.
Voya’s Investment Options
Voya offers a wide range of investment options within its 401(k) plan, allowing participants to customize their portfolios based on their risk tolerance and financial goals. These options include:
- Target-date funds: These funds automatically adjust their asset allocation based on the participant’s age and retirement date, gradually shifting from more aggressive investments (such as stocks) to more conservative investments (such as bonds) as retirement nears.
- Index funds: These funds track the performance of a specific market index, such as the S&P 500 or the Russell 2000, providing broad market exposure at a low cost.
- Actively managed funds: These funds are managed by professional investment managers who make investment decisions based on their research and analysis.
- Stable value funds: These funds offer principal protection and a competitive rate of return, although they may have restrictions on withdrawals.
- BrokerageLink: This option allows participants to invest in a wider range of investments, including stocks, bonds, and mutual funds, outside of the plan’s core investment lineup.
In addition, Voya offers a variety of educational resources and tools to help participants make informed investment decisions and manage their retirement savings effectively.
Summary of Voya’s Investment Options
The following table provides a summary of the key features of Voya’s investment options:
| Investment Option | Features |
|---|---|
| Target-date funds | Automatic asset allocation adjustment based on retirement date, low cost |
| Index funds | Tracks a specific market index, low cost, broad market exposure |
| Actively managed funds | Managed by professional investment managers, potentially higher returns |
| Stable value funds | Principal protection, competitive return, withdrawal restrictions |
| BrokerageLink | Access to a wider range of investments outside of the plan’s core lineup |
Fees and Expenses Associated with Voya 401k
Like all 401(k) plans, Voya 401(k) plans come with certain fees and expenses. These fees and expenses can eat into your retirement savings, so it is important to be aware of them before investing.
Fees and expenses associated with Voya 401(k) plans can include:
- Investment fees: These fees are charged by the investment companies that manage the funds in your 401(k) plan. Investment fees can vary widely depending on the type of investment and the investment company.
- Administration fees: These fees are charged by Voya for the administration of your 401(k) plan. Administration fees typically include expenses such as recordkeeping, investment management, and customer service.
- Participant fees: These fees are charged to you, the participant, for certain transactions in your 401(k) plan. Participant fees can include fees for taking out a loan from your plan, withdrawing money from your plan, or rolling over your plan to another account.
- Online tools: Voya’s website provides a variety of online resources, including account access, transaction history, and investment information.
- Phone support: Participants and plan sponsors can call Voya’s customer service line for assistance with their accounts and plans.
- Email support: Participants and plan sponsors can also contact Voya’s customer service team via email.
- Live chat: Voya offers live chat support for participants and plan sponsors on its website.
- Financial advisors: Voya offers access to financial advisors who can provide personalized investment guidance and support.
- Investment Options: Voya offers a wide range of investment options, including mutual funds, ETFs, and target-date funds.
- Expense Ratios: Expense ratios, which cover fund management costs, can vary among providers. Compare Voya’s fees to those of other providers.
- Employer Contributions: Determine if Voya offers employer matching contributions and if they are competitive.
- Participant Services: Assess the provider’s online tools, financial guidance, and customer support.
- Technology: Evaluate the user-friendliness and convenience of Voya’s online platform and mobile app.
The following table shows a summary of the fees and expenses associated with Voya 401(k) plans:
| Fee/Expense | Description | Typical Range |
|---|---|---|
| Investment fees | Fees charged by investment companies for managing the funds in your plan | 0.25% – 1.50% of assets under management |
| Administration fees | Fees charged by Voya for administering your plan | $10 – $50 per participant per year |
| Participant fees | Fees charged to you for certain transactions in your plan | $10 – $50 per transaction |
The fees and expenses associated with Voya 401(k) plans are comparable to the fees and expenses associated with other 401(k) plans. However, it is important to compare the fees and expenses of Voya 401(k) plans with other plans before investing.
Voya’s Customer Service and Support
Voya offers a range of customer service and support options to assist 401(k) participants and plan sponsors. These include:
Voya’s customer service and support have received generally positive reviews from participants and plan sponsors. In the J.D. Power 2023 U.S. 401(k) Participant Satisfaction Study, Voya ranked above average in customer satisfaction. The company has also received positive ratings from other independent review organizations.
| Category | Rating |
|---|---|
| J.D. Power 2023 U.S. 401(k) Participant Satisfaction Study | Above Average |
| Cerulli Associates 2022 Defined Contribution Plan Participant Satisfaction Study | Positive |
Comparing Voya to Other 401k Providers
When evaluating potential 401k providers, consider the following factors:
| Provider | Investment Options | Expense Ratios | Employer Contributions | Participant Services | Technology |
|---|---|---|---|---|---|
| Voya | Wide range, including mutual funds, ETFs, and target-date funds | Varying depending on investment option | Matching contributions available | Online tools, financial guidance, customer support | User-friendly online platform and mobile app |
| Provider A | Limited investment options | Lower expense ratios | No matching contributions | Basic online tools, limited financial guidance | Outdated online platform and mobile app |
| Provider B | Robust investment options | Higher expense ratios | Generous matching contributions | Comprehensive online tools, personalized financial advice | Advanced online platform and mobile app with enhanced features |
Well, there you have it, folks! Voya has its pros and cons when it comes to 401(k) plans. While it offers a solid foundation with low fees, the investment options could be more diverse, and the customer service record is a bit spotty. Ultimately, whether Voya is the right fit for you depends on your specific financial situation and investment goals. Remember to do your research and choose a plan that aligns with your needs. Thanks for reading, and please come back for more financial insights later!