As a 3M employee, your retirement plan offers a selection of mutual funds designed to help you grow your savings over time. Choosing the right funds is critical to maximizing returns while managing risk. In this guide, I’ll break down the best mutual funds available in the 3M retirement plan, explain how to allocate them based on your age and risk tolerance, and provide strategies to optimize your long-term growth.
Table of Contents
Understanding the 3M Retirement Plan (Savings Plan)
3M’s retirement plan is a 401(k)-style defined contribution plan that allows employees to invest in a mix of:
✔ Mutual funds (actively and passively managed)
✔ Target-date funds (automatically adjust risk as you near retirement)
✔ Company stock (MMM) (optional, but carries concentration risk)
The plan is administered by Alight Solutions, and investment options may vary slightly based on your enrollment date.
Best Mutual Funds in the 3M Retirement Plan
Below is a breakdown of the top-performing and most reliable funds available, categorized by asset class.
1. U.S. Large-Cap Stock Funds
These funds invest in well-established American companies.
| Fund Name | Expense Ratio | 10-Yr Avg Return | Risk Level |
|---|---|---|---|
| Vanguard Institutional 500 Index Trust | 0.01% | ~12% | Medium |
| Fidelity Contrafund (FCNTX) | 0.86% | ~13.5% | Medium-High |
| T. Rowe Price Blue Chip Growth (TRBCX) | 0.69% | ~15% | High |
Best for: Core growth in a retirement portfolio.
2. U.S. Small/Mid-Cap Stock Funds
These funds focus on smaller, high-growth companies.
| Fund Name | Expense Ratio | 10-Yr Avg Return | Risk Level |
|---|---|---|---|
| Vanguard Mid-Cap Index Fund (VIMAX) | 0.05% | ~10.5% | Medium-High |
| Fidelity Small Cap Index (FSSNX) | 0.03% | ~9.8% | High |
Best for: Higher growth potential (but more volatile).
3. International Stock Funds
Provides exposure to global markets outside the U.S.
| Fund Name | Expense Ratio | 10-Yr Avg Return | Risk Level |
|---|---|---|---|
| Vanguard Total International Stock Index (VTIAX) | 0.11% | ~6.5% | Medium |
| American Funds EuroPacific Growth (RERGX) | 0.46% | ~8% | Medium-High |
Best for: Diversification and hedging against U.S. market downturns.
4. Bond Funds (Fixed Income)
Lower-risk funds for stability.
| Fund Name | Expense Ratio | 10-Yr Avg Return | Risk Level |
|---|---|---|---|
| Vanguard Total Bond Market Index (VBTLX) | 0.05% | ~3.2% | Low |
| Fidelity U.S. Bond Index (FXNAX) | 0.03% | ~3% | Low |
Best for: Retirees or conservative investors.
5. Target-Date Funds (Set-It-and-Forget-It Option)
Automatically adjust from stocks to bonds as you approach retirement.
| Fund Name | Expense Ratio | Glide Path |
|---|---|---|
| Vanguard Target Retirement 2050 (VFIFX) | 0.08% | 90% stocks → 50% by 2050 |
| BlackRock LifePath Index 2045 | 0.09% | 85% stocks → 40% by 2045 |
Best for: Hands-off investors who want automatic rebalancing.
How to Allocate Your 3M Retirement Plan Investments
1. Aggressive Growth (Younger Employees, 20+ Years to Retirement)
- 70% U.S. Stocks (Vanguard 500 + Small/Mid-Cap)
- 20% International Stocks (VTIAX or RERGX)
- 10% Bonds (VBTLX)
2. Moderate Growth (Mid-Career, 10-20 Years to Retirement)
- 50% U.S. Stocks
- 20% International Stocks
- 30% Bonds
3. Conservative (Near Retirement, <10 Years)
- 40% U.S. Stocks
- 20% International Stocks
- 40% Bonds
4. Simplest Option: Target-Date Fund
- 100% in the fund closest to your retirement year (e.g., 2040, 2050, etc.)
Common Mistakes to Avoid
❌ Overloading on 3M Stock – Don’t let company stock exceed 10% of your portfolio.
❌ Ignoring Fees – High-expense funds (like some actively managed ones) eat into returns.
❌ No Rebalancing – Adjust allocations annually to maintain risk levels.
Final Thoughts
The 3M retirement plan offers strong, low-cost mutual funds from Vanguard, Fidelity, and other top providers. Your best strategy depends on:
✅ Your age and risk tolerance
✅ Whether you prefer active or passive management
✅ How hands-on you want to be
If you’re unsure, a target-date fund is the easiest choice. For more control, a three-fund portfolio (U.S. stocks, international stocks, bonds) is a proven approach.
