grrrdis:

I am a single 27-year-old attorney with no children, and would appreciate any and all advice regarding my 401(K) selections.

In 2008, I will contribute $5,000 to my Roth IRA equally in Class B shares of two (2) mutual funds: 1) American Funds Capital World Growth and Income Fund (CWGIX), and 2) American Funds New Economy Fund (ANEFX).

Also, in July 2008, I will begin contributing 10% of my gross income to my employers' 401(K). My employer uses Vanguard and I have the option to invest in the following funds: 1) Long-Term Bond Index (VBLTX), 2) Vanguard Asset Allocation Fund (VAAPX), Wellington Fund (VWELX), 500 Index Fund (VFINX), Growth Index Fund (VIGRX), and Windsor II Fund (VWNFX). Thus, taking into consideration my Roth IRA, which funds should I invest in and what percentage should I allocate toward each fund?

You are correct in taking your Roth IRA into account when deciding what to buy in your 401(k).  However, you should consider both decisions at once; since you can invest in anything in the Roth IRA, you should invest in the funds which best fit your portfolio.  Make a single asset allocation plan, and choose the best funds available in both accounts.  (If your 401(k) has no international funds, then you may be right holding all of your international funds in the Roth, but that depends on the size of your Roth as a fraction of your total accounts.)

For example, if your Roth is 20% of your portfolio, and you want 60% US stock, 20% foreign stock, 20% bonds, then you would have

20% international fund in Roth (see below)

20% Long-Term Bond Index (only bond fund available)

60% 500 Index

Or, alternatively, treating Wellington as 2/3 stocks with a weak value bias and 1/3 bonds:

20% international fund in Roth

60% Wellington

20% Growth Index

Are you sure that the American Funds are right for you?  B shares have a 5%-6% immediate purchase cost; it isn't deducted from your account, but once you buy them, you can't avoid paying the cost.  If you sell immediately, you pay 5%.  If you hold the shares for eight years (until they convert to A shares), you pay 0.75% a year in higher fees, which is 6%.  (If you have already bought the shares, the cost is already paid, so it isn't as clear that you should sell them.)