Fidelity offers elite 403b and 457b plans that allow you to construct a well diversified portfolio with lower fees than any other vendor. Unfortunately they continue to offer some superfluous high cost investments that novice investors may fall prey to. Still, because of the remarkably low fees, there is no vendor that we endorse more strongly.

Big Announcement
On Wednesday, 8/1/2018, Fidelity announced the creation of a total market domestic index fund (FZROX) and a total market international index fund (FZILX) that are absolutely free to invest in! It isn’t clear if these funds will be available in Fidelity’s 403b and 457b plans and we want to take time to cautiously process this seemingly too good to be true news. However, Fidelity may have cemented their status as the lowest cost vendor in the industry.

Portfolios and Fees

Three Fund Portfolio
Over 30 years the roughly 0.028% annual fee costs you 1.22% of your real profits.

  • Fidelity Total Market Index Fund (FSTVX)
    • 0.015% fee per year (expense ratio)
  • Fidelity Global ex US Index Fund (FSGDX)
    • 0.06% fee per year (expense ratio)
  • Fidelity U.S. Bond Index Fund (FSITX)
    • 0.025% fee per year (expense ratio)

If you were to criticize this portfolio it would be due to minor flaws in the international fund. It under-invests in small and mid size companies and only invests in roughly 2,000 companies (for comparison, Vanguard’s total market international fund invests in roughly 6,000 companies). Fidelity has a better international fund (FTIPX), but for reasons I can’t explain it doesn’t seem to be available in Fidelity’s 403b and 457b plans.

One Fund Portfolio
Over 30 years the 0.14% annual fee for Fidelity Freedom Index Target Date funds (FJIFX, FIHFX, FDKLX, etc) costs you 6.11% of your real profits.

Over 30 years the 0.11% annual fee for Fidelity Four-in-One Index Fund (FFNOX), which is 85% stocks and 15% bonds, costs you 4.82% of your real profits.

Notable Fees

  • $20 per year to maintain an account.

Notes on Fee Calculations

  • Assumes a 6% market return and a 3% inflation rate.
  • Assumes the following allocation:
    • 52.5% domestic stocks.
    • 22.5% international stocks.
    • 25% bonds.
  • Ignores the flat $20 annual fee.


  • Fund information can be found here.
  • We couldn’t find publicly available plan information, but after calling Fidelity we can confirm a flat $20/year fee.