1. YOUR PLAN INFO: Gather all available brochures, pamphlets, website links, etc. for whatever funds and plans are made available through your work
2. PLAN OPTIONS: Find out what retirement plan options (also called “containers”) are available in your plan(s)
   1. Do they make available 401k, 403b, 457, etc.
   2. Within each type of retirement plan how can contributions be made? (ie. pretax contributions to these, Roth, after-tax contributions, etc.)
   3. If  after-tax contributions are allowed for your plan(s), do they allow for “Non-hardship in-service withdrawals?”  This is CRITICALLY important to know if you reach an income & investing level where you can do “Mega-backdoor Roth” and https://www.bogleheads.org/forum/viewtopic.php?t=137366) contribution transfers.  Find out now so that you can plan for this if you get to this point sooner rather than later.
3. MATCHING: Does the employer match any contributions? (Usually yes in 401ks but probably not in 403b/457s – but states may do this)
   1. If so, what is the matching formula?
   2. If so, you want to AT LEAST contribute up to the maximum match amount.  If at all possible, in most cases, you will want to contribute up to your personal limit in the pre-tax contribution.  For example, a typical matching program is that if you contribute 15% of your pre-tax salary, company matches first 5%.  So, if your salary is $50,000 per year, you would put $7,500 into your 401k and your company would put $2,500 – for a total of $10,000 in your 401k!  This is like getting free money for a 33% return on your investment – before it’s even invested!)
4. PROVIDERS: For whatever plans exist, who are the specific service providers you must select from (i.e. Vanguard, TIAA-CREF, Fidelity, Valic, others, etc.)?
   1. Find out which providers charge service fees and how much, specifically, these fees are for each investment service.
5. INVESTMENT OPTIONS: For each combination of service provider and retirement plan container (i.e. Fidelity 401k or 403b, Fidelity 457, Valic 403b, Valic 457), obtain a detailed listing of each investment option (i.e. into which specific funds can you direct your contributions)?
   1. Expense ratios matter!
      If available, at a minimum get expense ratios for every available fund in every combination. Also, you might want to get listing that has historic returns (1Y, 3Y, 5Y, 10Y, Life) but this is much less important because it really doesn’t matter much for index funds.  [“Bogleheads” are usually only interested in fund name/ticker symbol and expense ratio and don’t look at individual returns very much, but we looked at them to be comfortable in selecting ours just to be sure we weren’t selecting an outlier on the down side or short/long term.)
   2. Identify all available index funds in each combination
      (Market index, bond index, value index, international index, etc).  For example, Bogleheads generally have a Three-Fund Portfolio. This means if you had Vanguard as an available provider, you might select Vanguard Total Domestic Stock Market, Vanguard Total International Stock Market, and Total Bond Market.  With these 3 you would be invested in all bonds globally, all international stocks, and all domestic (U.S.) stocks.A brief summary of the Boglehead philosophy is that, long-term, the total market & bond indexes beat ALL OTHER METHODS 90%+ of the time.  There is ample academic and practitioner evidence that this is true in any long-term (i.e. 20+ year period) you want to evaluate over the last 100 years.  You would then select how much % to invest in each (This is your “asset allocation”).
   3. Be efficient in Equities + Bonds
      This is more information for more advanced investors.  There is an “Efficient Frontier” at which the expected return of a combination of equities & bond funds outperforms a 100% equities strategy, long-term (20+ years).  This would be a simple way to invest in the Three-Fund Portfolio if you have all three (total market index, total bond index, total international index) of these funds available across all your investment options/buckets.  We use more than 3 specific funds because of what is/isn’t available across all of ours. For example, we might take an S&P 500 fund + a Vanguard small cap value index fund + total international index fund + total bond market index fund.  The S&P 500 + small cap approximates the total market. You could use other combinations of approximating total market, bond, or international as necessary).  You could also use a Target Retirement Date- type fund if it is available for you which manages the balances and re-allocations for you.  One fund-simple, invest and forget.
   4. Allocate Assets
      You will have different options available in each combination and each type.  Your asset allocation will be over your entire investment portfolio and includes IRAs, stocks, mutual funds, possibly your real estate, etc.
6. TAXES: Be Tax Efficient in your Asset Allocations
   1. Once you are in a Roth, it is never taxed. So, your goal is to put whatever you expect to have the highest return (at lowest cost) into the Roth. Generally, this is domestic equities (stock funds).  Might also include international funds.
   2. If you invest the maximum available to you (i.e. 18.5K each in Roth, 401k, 457b, 403b or 403b PLUS $5500 each in IRA or Roth IRA), then your plan might also allow you to each invest up to 53K after tax in these!  For high earners, this is very important.  Check your plan.
7. DEFERRED COMP: Do you have deferred compensation plans available ?
   1. If so, what are they, who is/are the provider(s), what are the investing options, at what income or title level can you start participating etc.
   2. Gather same info as you would for 401k / 403b / 457 plans as detailed above.

LEARN

1. READ! Go ahead now and get the following books and read:
   1. Boglehead Guide to Investing – 2nd Edition (by Mel Lindauer, Taylor Larimore, Mel Lindauer)
   2. All about Asset Allocation (by Rick Ferri)
   3. Then read some more! (see below)
2. Bogleheads.org: Go to the Bogleheads.org site and start reading their Boglehead Wiki
3. Resources: Check out my collection of a lot of links and other resources based info in the Boglehead and other books.
4. Risk Tolerance: Take the questionnaire on risk tolerance (you & your spouse need to do this separately) : Go to https://personal.vanguard.com/us/FundsInvQuestionnaire

COMMIT

• Create your Investment Policy Statement  (IPS)

“An Investment Policy Statement forces you to put your investment strategy in writing and commit to a disciplined investment plan.” This is your own personal investment philosophy – what you’re going to do and when, etc.  It helps keep you on track when the market is very volatile or way up or way down.

Here’s a great IPS template: http://im.morningstar.com/im/InvestPolicyWS.pdf

ANALYZE

Once you have your investment plan in place (or to help you evaluate your plan before you implement or make changes), you can also use aggregator / analyzer tools to help you understand the impact of your choices

1. http://PersonalCapital.com –  aggregates all your financial accounts to give you a daily update and asset allocation
2. YNAB – “You need a budget”  – yes, yes you do!  This software helps you budget every incoming and dollar
3. https://www.PortfolioVisualizer.com – evaluate different allocations and expected returns over the long term.  Uses Monte Carlo simulations.
4. http://Morningstar.com (usually free via your library login) – See all the details on each fund, expense ratios, index benchmarks, returns, stability, etc).  Also can look at the Morningstar 9-box which shows how each fund (or your entire portfolio) is positioned.

MORE READING…

1. Invest early and often
2. Invest for the long-term
3. DO NOT withdraw funds for anything short of actual life emergencies
4. DO NOT buy bling bling
5. Monitor but don’t obsess over results
6. Re-allocate as necessary
7. Enjoy Retirement!