Polly's Fidelity 403(b) — Allocation Research
Builds-on: portfolio-rebalance-april-2026 Related: ai-crash-portfolio-defense Related: macro-force-vectors-april-2026 Informs: Projects/portfolio-lab
Execution status (2026-04-26): Orders placed inside the U District Partnership menu — Path A three-fund simple (target-date 2050 + TIPS sleeve via FIPDX), funded by selling SPAXX. Trades pending overnight settle. Employer match and contribution rate still unverified — next-priority lookup.
What We Know
- Account: Fidelity 403(b) through U District Partnership (her current BID employer), ~$50K, 100% SPAXX (Fidelity Government Money Market Fund — core cash position).
- Status: ACTIVE. This is her current-employer plan, not a legacy account. That changes the playbook — rollover to an IRA is off the table while she's employed there (in-service rollovers are rare for under-59.5 participants and not worth assuming). The rebalance happens inside the U District Partnership fund menu.
- SPAXX yield (Apr 26, 2026): 7-day yield ~3.30%, 30-day ~3.29%, TTM ~3.71%. That's below realized inflation (~4.5%) and below your TIPS target real-yield. Dead money in the same pattern as the Ascensus stable value was.
- Household share: Your portfolio is ~$165K, hers is ~$50K. She's ~23% of household retirement assets. Big enough to matter, small enough that simplicity wins over precision.
- Contribution rate questions now live. Since this is her active plan, allocation isn't the only lever — contribution % and (potentially) employer match are too. See the bottom section.
What We Don't Know (and How to Find Out)
The Fidelity 403(b) fund menu is employer-specific. Two 403(b) plans run by Fidelity can have completely different menus. Until we see the U District Partnership menu, every allocation below is conditional.
To get the menu in 5 minutes:
- Have Polly log into NetBenefits.com, pick the 403(b) account, click "Investments" → "Change Investments" or "Investment Performance & Research." The full list of available funds shows up there.
- Or call Fidelity at 800-343-0860, give the SSN, ask for "the investment lineup for the U District Partnership 403(b)."
- While she's in there, check whether the plan offers BrokerageLink — Fidelity's self-directed brokerage window. If yes, she has access to thousands of ETFs (SCHP, VDE, VBR, etc.) and the allocation can effectively mirror your IRA. If no, we're working from a fixed mutual-fund menu.
Three menu archetypes you'll see:
| Archetype | What's there | What's not | Likelihood (small Seattle BID) |
|---|---|---|---|
| Skinny menu | Fidelity Freedom Index target-date series, FXAIX (S&P 500), FSPSX (intl), FXNAX (bonds), SPAXX. Maybe FIPDX. Often a "Fidelity Advisor" or "Class K" share class. | Energy, gold, small-cap value, REITs as standalone funds. No BrokerageLink. | High — small BIDs typically use Fidelity's pre-built lineups |
| Standard menu | Above + FIPDX (TIPS), FSSNX (small cap), FSGGX (intl small), maybe a value fund (FLCOX), maybe a REIT fund. | Sector ETFs, single-commodity exposure. | Medium |
| BrokerageLink open | Whole ETF/mutual fund universe, plus the core menu. | Nothing — full IRA-equivalent flexibility. | Low for a ~50-employee BID. Worth checking — costs nothing to ask. |
If she has the U District Partnership benefits onboarding packet or a recent plan summary annual report (SAR), the fund list is in there. Otherwise the NetBenefits route is fastest.
What 403(b) vs 401(k) Means Here
Practically nothing for the allocation question, but a few things worth knowing:
- Same contribution limits. $23K under-50 in 2026, plus a 15-year service catch-up at some 403(b) plans (probably not relevant — she'd need 15 years at the same nonprofit).
- Same rollover rules. A 403(b) from a former employer can be rolled to a traditional IRA with no tax event, exactly like the Ascensus 401k → Schwab IRA move you just did. Different code section (403(b)(7) → 408), same paperwork.
- Annuity products. Some old 403(b) plans (especially with TIAA/AXA/Voya/Lincoln) hold money in variable annuities with surrender charges and 1.5–2.5% all-in fees. Fidelity 403(b) is normally mutual-fund-based so this is unlikely, but worth a glance — if any holding name has "annuity," "VA," "guaranteed," or "fixed account" in it, flag and dig in before moving.
- No employer stock. Not a thing in nonprofits.
- No catch-up needed yet. She's 40. Standard contribution limits.
The 403(b)-vs-401(k) distinction is mostly invisible at the participant level on a Fidelity-administered plan. Treat it as a 401(k) for allocation purposes.
The Real Decision: Two Paths (Rollover Path Removed)
Because this is her active U District Partnership plan, the rollover-to-IRA option from the prior draft is unavailable. The rebalance happens inside the 403(b) menu. Two real paths remain — full rebalance and a quick-fix two-trade version. (A Path 3 — wait until she changes jobs and then roll — exists but is hypothetical and the SPAXX bleed continues until then.)
Path A — Rebalance inside the 403(b) using the menu
The exact tickers depend on the U District Partnership menu, but the three-fund simple version works on almost any Fidelity 403(b):
Three-fund simple (works on a skinny menu):
| Fund | % | Dollar | Why |
|---|---|---|---|
| Fidelity Freedom Index 2050 | FFFHX | 70% | $35,000 |
| Fidelity Inflation-Protected Bond Index | FIPDX | 25% | $12,500 |
| SPAXX (cash) | SPAXX | 5% | $2,500 |
If FIPDX isn't on the menu (some skinny plans only carry FXNAX aggregate bonds, not the inflation-protected sleeve): substitute FXNAX at 15% and tilt the rest into the target-date fund. You lose the inflation-specific hedge but gain duration as crash insurance. Not as good as TIPS for stagflation, but better than 100% SPAXX.
Five-fund standard (works on a standard menu):
| Fund | Ticker | % | Dollar | Role |
|---|---|---|---|---|
| Fidelity Freedom Index 2050 | FFFHX | 50% | $25,000 | Core |
| Fidelity Inflation-Protected Bond Index | FIPDX | 20% | $10,000 | TIPS |
| Fidelity International Index | FSPSX | 15% | $7,500 | International |
| Fidelity Small Cap Index | FSSNX | 10% | $5,000 | Small cap |
| Fidelity US Bond Index | FXNAX | 5% | $2,500 | Aggregate bond crash buffer |
This is structurally identical to your Fidelity 401k post-rebalance, just without the value/PNVZX line and slightly heavier on TIPS to compensate for less granular hedges.
Path B — Half measure: trim SPAXX, buy TIPS, leave the rest
If Path A feels like too many decisions to make today and you want a literally 5-minute change:
- Sell all $50K SPAXX.
- Buy $10K FIPDX (or FXNAX if no TIPS option). 20%.
- Buy $40K Fidelity Freedom Index 2050 (FFFHX). 80%.
This gets her out of cash drag, into broad equity exposure, with one TIPS sleeve for downside protection. Two trades. Done.
The cost vs. Path A: less international tilt, less small-cap tilt, slightly more US-large-cap concentration. But it's the version that actually gets done today vs. sitting at 100% SPAXX while we wait to coordinate the full menu lookup.
Bonus: BrokerageLink path (if available)
If U District Partnership's plan turns out to have BrokerageLink enabled, treat that as Path A-plus: open the BrokerageLink window, transfer (typically up to 50% of the balance, $25K) into it, then buy the same five-ETF mix from the original IRA recommendation (SCHP / SCHF / VBR / IAU / target-date or VTI). Keep the other 50% in the standard menu's TDF as the core. This is the closest thing to the IRA-rollover flexibility you'd otherwise be giving up.
Side-by-Side: Which Path When
| Condition | Recommended Path |
|---|---|
| Default — she's actively employed at U District Partnership | Path A (rebalance inside menu) |
| Menu is BrokerageLink-enabled | Path A + BrokerageLink — buy SCHP/SCHF/VBR/IAU through the brokerage window |
| She wants to think about it for 0 minutes | Path B (one trade pair, two trades total) |
| She wants to never think about retirement again | Path A three-fund (target-date does the work) |
| She changes jobs in the future | Roll to Polly Traditional IRA at Schwab at that point — same logic as your Ascensus move |
How This Connects to Your Recent Rebalance
Your April 12 plan (portfolio-rebalance-april-2026) treated the household as five accounts totaling $165K. Polly's $50K is a sixth account that wasn't in scope. Adding it changes the holistic picture meaningfully:
| Metric | Pre-Polly | Post-Polly (Path A five-fund) | Post-Polly (Path B two-trade) |
|---|---|---|---|
| Total household | $165K | $215K | $215K |
| TIPS exposure (target after both rebalances complete) | ~9% | ~10.7% ($23K) | ~10.4% ($22K) |
| Cash | ~7% | ~5.5% | ~5.7% |
| US equity concentration | ~32% | ~33% | ~34% |
| Small-cap value | ~5% | ~5.5% | ~5.0% |
| International | ~24% | ~24.5% | ~24% |
Either path moves the household from "his portfolio is rebalanced, hers is dead cash" to "both portfolios reflect the same scenario thesis." Path A captures more of the diversification tilts; Path B captures ~80% of the inflation-hedge benefit in two trades. Both materially better than status quo.
The bigger point: her account being in 100% SPAXX has been silently degrading the household allocation. The portfolio_lab simulations of your scenario set assume her cash is doing what cash does (losing to inflation). She's been the silent counterweight to your rebalance. Fixing it tightens the household to the thesis.
What the SPAXX Position Has Actually Cost
Quick math, just so the urgency lands:
- $50K × (4.5% inflation − 3.3% SPAXX yield) = ~$600/yr in real purchasing power lost.
- vs. Path A (70/25/5 with FIPDX ~4.7% real yield + FFFHX ~6% expected real return blended): expected real return ~5.0%/yr → ~$2,500/yr.
- Annual upside of moving: ~$3,100/yr in real terms at the median scenario.
- In a Hormuz oil-shock scenario where TIPS does its job: could be $5K+ in the first year.
This is the exact same logic as the Ascensus rollover. Two pools of dead money, both yours-and-hers, both bleeding to inflation. You handled yours. Hers is the second domino.
Practical Sequence
- Polly logs into NetBenefits, captures the fund menu (screenshot or paste tickers). 5 minutes. Also note: is BrokerageLink offered? Is there an employer match? What's her current contribution rate?
- Pick a path based on the menu archetype.
- Execute using Fidelity's "Change Investments" / rebalance tool. Set target percentages, one transaction. Also update the contribution allocation so new payroll deferrals go into the same percentages — otherwise new money lands in whatever the default is (often back into SPAXX or the target-date fund).
- Update the household spreadsheet in
~/Projects/portfolio-lab/data/so simulations reflect her positions going forward.
What This Doesn't Do
- Doesn't add complexity she has to manage. Path A three-fund or Path B are deliberately set-and-forget. No ongoing rebalancing decisions.
- Doesn't depend on her sharing your macro thesis. The TIPS allocation makes sense even under a soft-normal scenario — it's a real-yield bond, not a directional bet.
- Doesn't require a financial advisor. This is plumbing, not strategy.
The Live Levers (Now That We Know It's Active)
Allocation is one knob. With an active plan, three more matter:
- Contribution rate. What % of her ~$110K salary is she deferring? The 2026 employee limit is $23K. At her household savings rate, she should be near that. If she's at e.g. 8% ($8.8K), there's $14K/yr of unused tax-deferred space — and $50K starting balance suggests she's been under-contributing for a while.
- Employer match. Does U District Partnership match? Even small BIDs sometimes do 3% safe-harbor matches. Free money — this is the highest-priority lookup of all four. If there's a match and she's not capturing the full match, that's the first move before anything else.
- Roth vs Traditional split. Many 403(b) plans now offer a Roth option. At household income ~$370K (24% federal, ~9.5% WA capital-gains-on-stock-sale-equivalent) she's in a high enough bracket that Traditional probably wins vs Roth. But if she'll downshift income later (different role, part-time, etc.), some Roth could make sense. Default to Traditional, revisit if her career path shifts.
- Beneficiary designation. Worth a glance while she's in NetBenefits. Should be you (or per a plan you've discussed). Defaults vary by enrollment and can be stale.
The highest-leverage move of the four, if there's any unused match, is fixing the contribution rate — that's potentially thousands of dollars per year of free employer money, which dominates the SPAXX-vs-TIPS comparison.
Open Questions for You
- Has Polly looked at this account in the last year? (Some 403(b) custodians auto-default new contributions to a target-date fund; SPAXX-100% suggests she opted into cash at some point — or every paycheck has been depositing into SPAXX since enrollment.)
- Does she care about the strategy, or does she want you to just point at the simplest "right answer"? (This pushes Path A three-fund vs Path A five-fund.)
- What's the employer match situation? (See live-levers section above — this could be the most important question of the bunch.)
- What's her current contribution rate? Is it capturing the full match if any?
Sources
- Fidelity 403(b) plan options for non-profits — confirms menu varies by employer; mutual-fund-based, not annuity-based for Fidelity-administered plans.
- SPAXX fund summary — 7-day yield ~3.30% as of April 2026, government money market fund.
- FIPDX (Fidelity Inflation-Protected Bond Index) — 0.05% ER, intermediate duration TIPS, the inflation-hedge sleeve commonly available in Fidelity 403(b) menus.
- Fidelity BrokerageLink overview — self-directed brokerage option that some 403(b) plans enable; gives access to thousands of ETFs/funds beyond the core menu.
- Fidelity Direct 403(b) product 68 listing — small-nonprofit Fidelity 403(b) product profile (page returned 403 to fetch but listed in 403bcompare).
- Internal: portfolio-rebalance-april-2026 — the full household rebalance plan this extends.
- Internal: macro-force-vectors-april-2026 — three-lens regime analysis driving the TIPS-as-primary-hedge thesis.