Reddit fire target date funds. The funds to stay away from charge 1% and up.

Reddit fire target date funds 75%. 015% 1/10 of the target date. Personally, I love target date retirement funds. Depends. 75% does seem on the high side. When choosing between target date funds, it depends on your desired risk level. Or check it out in the app stores Go to Fire r/Fire. 8%. I’m sure it’s a very minor difference, but when I rolled over my 401k to my new Fidelity 403b, some options came up, and I chose the State Street Target Date 2045 fund, without really thinking. Every year most companies will also pay out a part of their profits as dividends (dollars). The vanguard 2060 has an ER of 0. But anyway, it's a target date fund as I imagine that's when I'd retire. My strategy would give them better overall growth, at the cost of more The target date fund is a fund of funds—it’s doing what TIAA’s simulation is doing, but within itself. My reasoning is the aggressiveness of some of the longer out target dates funds might help me catch up so to speak. The date in the fund name simply refers to where in the "glidepath" the fund is in terms of asset allocation. So by definition, a TDF will underperform a purely stock fund. I’m 25 and still have a while to go until financial freedom but I will say, I’m all in on VTI for my portfolio and while I am invested heavily in just stocks, I know my stomach will turn over if there is an economic downturn in the future. The later years simply start the glide path later. TLDR: get the Schwab Target index fund Reply reply That means that also the value of your shares will grow. I don’t think there is much bond exposure unless the target date is like within 10 years so 2030 or maybe 2035. As for Target Date Funds, they also have mutual funds with various sectors as well as bonds. 12) but wondering if there Hello and welcome to our sub, u/JeffyFan10!I am happy to assist with some information on target date funds. The pros: it’s simple, you are going to easily be fairly well diversified, it will automatically rebalance within itself to keep a risk level that’s appropriate for the class of investors within it (retiring around 2040). Of course the increase in tax owed , came as a big surprise for me , since I personally did not sell any portion of the fund . They rebalance every year and shift your investments from higher to lower risk funds as you approach retirement. Would it be better to continue putting additional money away into the 403b until I hit the annual allowed maximum or should I put that same amount of money into a target date fund offered by a brokerage (like Fidelity). 37% expense ratio while the 2065 is a 0. There may be a short-term trading or redemption fee to protect the interest of long-term Aside from that point, I agree with what others say about target date plans. But the expense ratios of target date funds seem to be expensive. At a glance, target date funds seem like a convenient package, essentially a 3-fund portfolio (stocks, bonds, international) with an added advantage of automatic rebalancing and risk adjustment as one nears retirement. I am 23 years old and have a long time horizon. I should recommend target date funds for everybody because there are lots of experienced and knowledgeable investors who would have been better off if they would have just selected a target date fund for their investments. I imagine target date fund is cheaper. This might be because it was on "earlier" letters than "M". It's doesn't tip over to 30%+ bonds until 10 years or so before the target date. The funds in my 401k are invested in a target date fund with an expense ratio of 0. Do a 3-fund portfolio. usually a bit safer. If I re-balance my allocation once per year, I end up saving myself about 70 bucks per 100k invested PER YEAR when all is said and done. 05 percentage points a year. Target date funds also happen to be more conservative than I would like (more fixed income than I think necessary for younger workers). The expense ratio is ok, it's not great and you could definitely do better in index funds but you would have to rebalance those manually according to Does anyone know if Vanguard or any other company in Canada has Target-date funds that automatically diversify your portfolio (stocks, bonds, etc. I enjoy the target date funds, but what I don't fully understand is why the 2060 fund is a 0. Your is probably very heavily weighted in index-type funds already, so no need to mess with it unless you want to experiment with particular funds. 70% while Vanguard is more palatable 0. 75) vs the index (. Don't buy a target date fund for the year you plan to FIRE, it'll probably be way too bond heavy. There are a few other vanguard funds, but they don't look like target date funds, which we were looking for initially. I'm not a skilled investor by any means, but I'm looking to do away with the robo investors inside my 401(k). Target date funds for like 2060 and beyond have less than 3% allocated to bonds and it doesn’t increase those percentages much if at all until you’re considerably closer to retirement. 08% in their target date funds, but only . Are target date funds expensive in fidelity ? I want to rollover my 401k from my previous employers into IRA and invest in target date funds to consolidate all of my 401ks in one place. I moved my money to a 2035 target date, to let the fund manage annual rebalancing and gradually reallocation. They could swap back and forth if needed. Since I am behind on my savings and don’t want actively manage my funds I’ve chosen target date funds and ones past my expected retirement. It also assumes a glide path of retiring in 2060, so it won't change very much by the time you retire. 15% Expense ratio, but fidelity charged me a $75 fee. 100% VTI/VOO Different target date funds issuers may use slightly different glide paths, so internally it might be possible that a 2030 from company A is closer to company B's 2035 than 2030. Would it be wise to get into these funds ASAP or should I wait some time and see what happens with them, price wise? I like the simplicity of them. 12% The target date funds don't immediately go down to 30% stocks. Target date funds are recommended quite a bit in here, though. I’m not investing for my use (although the funds are there should I need them) but I am investing for my children and grandchildren Then using target allocation or using a self managed 3 fund portfolio would be better in your case. If you really wanted to you could sell it and buy the underlying funds and rebalance by yourself. Fidelity’s own Target Date Fund has no fee, but an expense ratio of 0. The target date funds of 2055 should have a high percentage of stocks and a low percentage of bonds. 03% management rate of the S&P Fund and the . Basically, we're looking at 1989 American Funds 2055 TDate R6, but we can't seem to find any other funds that we would contribute. There is no reason for a 26 year old to need to be in virtually any bonds. Their advice around investing is a lot more specific than anything you’ll find from Dave and they’ve got a whole wiki that dives into a lot of this kind of stuff. If you invest in those with target dates beyond 2045, I don’t think it has much bond so it could work for people with longer time horizon as these funds don’t include bonds until it gets closer to the target date. Both will have taxes for selling and dividends. I see the expense ratio is a lot higher for the actively managed (. S&P 500 funds will always track the index. 15% whereas the vanguard 500 index admiral fund is 0. & international) and total bond market index funds (both U. If you're at a loss for where to begin, start with a Target Date fund and learn the basics of investing before you start tilting away from a broadly diversified global portfolio. 32 years old have about 70k in IRA traditional and about 6k in IRA Roth. Numerous TDF holders got left with a huge tax bill in 2022 when it shifted to a more conservative portfolio. Well, looking at returns so far this year in my account, my target fund is down 16% compared to 11% for the S&P. Vanguard, the king of low expenses, is 0. 53. Depending on your age I’d say invest in the overall market or target date fund if you’re 40+ years old. Internally target date funds are essentially the very popular 3 fund concept, just managed for you. And get rid of target date funds, you don't need them and they tend to be even higher fees than the S&P 500. Members Online. 08% management fee of the target-date fund and feels like he's lighting it on fire. I just opened my Vanguard Roth IRA and am putting $6k in it. Actively balanced I think the fee is like 0. There's evidence also that people do well when regularly contributing into this fund and not messing with it during market cycles (ie: you are holding it for 20 years, and not freaking out every time the S&P goes down). Target retirement 2025 is still 57% stocks. Is it better to go 100% target date fund, 100% VTI/VOO, OR possibly a 50/50 combo? Of just these 3 options, 100% TDF. Most mutual funds and Target Date funds do. That said, I've Two years ago, I came on here asking about target-date funds after doing a bit of independent research. I’m currently in school so I only plan on investing $50-100 monthly but I’m having trouble understanding the wording. Regardless, I've played with some calculators and it seems like the difference between 0. Is using 2060 Target Date Funds in all my retirement accounts (Not including Taxable) a GOOD or BAD idea? I am talking ROTH 401K, ROTH IRA, and HSA here. No, target date funds are fine. Schwab's funds start at more than 90% stocks because you can afford the additional risk of equities during your early investment years. Don't be led astray by people who say otherwise. 13% for VTTVX vs about 0. Another issue with target date funds and performance is that target date funds can issue very large distributions that get reinvested. e. I’ll probably start drawing funds out in 2024-25. I had 100% in stock funds until fairly recently, when I decided that was too aggressive for my late 50s. However, I don’t know which investments to pick. For example, the Vanguard Target Retirement 2030 Fund has an expense ratio of 0. ) With the rest of the money I want to invest into my 457b which offers “JPMorgan SmartRetirement Target Date funds” which I know nothing about. Or check it out in the app stores Best target date funds for 2065 on Fidelity? Investing Questions (FIRE) with a focus on the UK. I opened a Roth IRA account with vanguard recently and I am maxing out that every year contributing to VTTSX (2060 target fund. back in November and now is a bit less than 60%). Rowe My employer offers 100% match up to 8% and I’m currently doing 10% (18% total) into it. I don't want to do a target date fund because I want to actively try to maximize my retirement plan. 38%). I have an employer sponsored 401k (contribute to get their full match, Fidelity Target Date Index Fund 2055) and an HSA. When I first rolled over my 401k into an IRA, I chose to invest 2/3 of it into a target date fund (the remainder went into VOO) because I thought a target date fund would be a smart/safe choice. 08% 0. I chose this because I liked the idea of not really having to actively monitor the portfolio or make many decisions. Yes, the target fund would hold more bonds, reducing the impact of the crash and making sure you can still retire on that date. Is there a drawback to using a Target Date Fund from Vanguard in a taxable account? Hi all, I'm in my 20s and luckily in a place financially where I can fully contribute to a Roth IRA. Their higher-fee target date funds contain actively managed funds. 16 percentage point on my target date fund, but if I were to manage a similar portfolio of funds I could get index funds ranging from 0. Plan on working for another ~30 years. All those funds are in their 401k, so there's no penalty whether they invest in the target date fund or the set I'm suggesting. I know I could do no bonds till I am 45-50. My retirement currently sits in the Vanguard 2045 target date fund, but I have an upcoming appointment with their Advisory Services to conduct a more comprehensive overview. I have 100% of my portfolio invested in a target date fund in my Roth IRA through Vanguard. I personally find target date funds too conservative as well, I track the SNP 500. Specifically BlackRock Life Path target date fund vs Vanguard Wellington Admiral (VWENX) Which one would be a better choice? Any pros and cons to having one or the either. The reason I picked those funds as opposed to the 2050 fund is that the 2050 fund has more bonds than I'd suggest for someone pursuing FIRE. So, in the long term, you might want to roll your own allocation. I didn’t love either option, but since this is long term I That target date fund is an active managed fund but I am really not a fan of them. It becomes a stable value fund essentially after you’ve reached the target date. They’re low-cost, diversified, and dynamic in the sense that they change depending on my age. Your current target date fund will add more bonds automatically as you approach the year 2044. Go to the links below to see a comparison of historical returns for each of the individual funds and the lifecycle Vanguard’s Target Date funds are pegged at 10% bonds until 25 years out, meaning that right now any of their TDFs 2045 or later are the exact same. Do I need to worry about Wealthfront creating wash sales if they don't know about those target date funds? You know, when it comes to expense ratios, you're saving at most a tenth of a percent (usually a few hundredths) by picking-and-choosing low expense ratio funds rather than just investing in a target date retirement fund. 01% stocks. They're essentially a diversified mix of domestic and international index funds, and slowly transition from a stock-heavy to a bond-heavy ratio toward the target I recently opened a Roth IRA and decided to start investing in the Vanguard 2070 target date fund. They're I currently don’t know what life events may adjust my FIRE timeline and would like to get out of the required glide path enforced by the Target Date Funds - Targeting around $3M Target date funds hold US equities, international equities, and bonds; all three are extremely important in a retirement portfolio, and a TDF takes out decision-making and the biases of the psychology of investing. I currently have a 529 setup with 100% of allocations going into target enrollment date funds 2034/35 and 2036/37 (2 kids). In my 401k where I don't have access to such a fund, I go with an 80/20 split (in my "American stock investments") between an S&P500 index fund that has a 0. VOO added to a target date fund decreases diversification by pushing holdings closer to US large caps beyond what's already present in it, not increases it. However, just because a Trust doesn't mean you don't benefit from the dividend: it internally reinvests for you, so it's the same effect as if it was a mutual fund that paid them out and you had it set to reinvest. Please help me understand why the Vanguard target date funds show positive return when you look at the fund performance. You are talking about these % numbers as if they only applied to your contributions in the year you make them. 9% YTD ) and so far this year. Background: 35 years old, currently w/ 50k in Fidelity IRA all parked in S&P500 mutual fund (FXAIX), considering switching it all to target date index fund (FIPFX) after reading more content from this group — would sincerely love any advice on Retirement target date funds adjust asset allocation every 6 mths or so becoming more conservative as you approach retirement date. This is what you want your allocation to be currently, as your retirement date is at least 20 years off: relatively high risk, but also a lot of growth potential. How do I decide? 31 years old. if stocks drop, bonds will be sold to buy more stocks, and vice versa). If he's like me, he sees the . 37 and 0. I'm currently on a target date fund of 2050, not sure why I was placed there but it seems that for 2050 about 80% are stocks, whereas the target date fund for 2055 stocks are about 99. I use a 2030 Target Date index fund for my HsA investments. Currently, I put all my Roth into SWYOX (2065 Target date fund) for simplicity but I am reading that may not be best and to put it all into SWTSX or SWPPX instead. S&P funds, Index Funds either Mutual or ETFs follow the total market or specific sectors. Target date funds are meant to be diversified portfolios that pair your returns with your risk level (based on years until retirement). I rebalance once a year; it takes 15 minutes. I feel like I made a mistake here and should have went with the VMFXX option. so if market goes up 10% a tdf would go up 8% or so, and if the market (lets say) drops 20% the target date may drop 16% or something like that. I'm curious about the differences - suggestions welcome - between the options listed in the title. New Target Date funds available in normal brokerage accounts, opened on October 17th of this year. To put that in perspective, you're talking 10-100 bucks a year on a $100,000 investment. It avoids much of ownership on high techs. The reason a mid-cap index fund is currently outperforming a target date fund is because they have different purposes. If you don't know any better, choosing the fund with the date you plan to retire is a good option, as it's designed to be a "one-size-fits-all" approach to retirement savings. 0. 05%) and as such I kind of recreate a total US Market index fund for myself (it's not perfect; I personally don't think it has to be). If it is a Trust, it won't. Also some target date funds are designed to continue to change for a few years after the target year, others end their glide path at the target year. There are some disadvantages to target date funds. I personally like Target Date Funds in that it's a set it and forget it method for people who don't like to worry about it. , well defined glide path), but I'm relatively young and am OK with being more aggressive with my investments. Total REIT exposure at start is about 8%, compared to about 3. Target date funds make a lot of sense for retirement investments but there’s not really a reason to prefer them for taxable brokerage. My question is if I should stick to being 100% in the target fund or if I should maybe put 20% in something like VOO or VTI? I'm (20) setting up a 401k through fidelity and it gives me the option to let them manage it, set a target date, or make my own investments. I want to fund my Roth IRA with the full $7k this week for the year. I'm thinking of switching to a total market index with a I had target date fund for about 3+ years and its growth was very small. 15 votes, 19 comments. I did like the "set it and forget it" nature of the target date fund (i. If you have a 20 year run rate, the S&P 500 ticker: VOO or SPY is all you need. Are these decent choices to invest into? Thanks! I want to start a 457b plan, and the two choices I have in mind is a target date fund and balanced portfolio fund. Tax penalties and withdrawal penalties are based on the account not the fund and would occur if you invested in Cash, Bitcoin, Target Date funds, or index funds, when you withdrew in a I can only think of two reasons why you'd choose an S&P500 index fund (plus other index funds) over a target date fund: To save on expense ratios. I always recommend a target date fund for newbies. 1% chosen because it was a bull year except March. Both are 2050 funds, but have a huge difference when it comes to fees, Schwab's being 0. 08%. Target date sort of does the same, but tend to be more expensive (even if only slightly) than picking the funds yourself. The only exceptions are Vanguard Admiral share index mutual funds. The reason I still prefer indexes even given this backtesting is that there are plenty of actively managed target dates that Respectfully, I'm not sure where you're getting that glidepath. and 40% to international, even as global market caps drift (VT was a bit more than 60% U. If it is a mutual fund, it will. I’d be looking specifically at the 2045 funds. They average 6%-8% over their life. I’m not really a fan of developing markets considering things like currency depreciation, political stability, corruptions I could be wrong. Return from 2021 year was +9. The biggest is that these funds come with a high tax cost if you’re investing in a taxable brokerage account because of the way they work. I know VTSAX, VOO, and VTI are common r/Fire approved funds, but what about for 401k? Especially since hopefully many of us are taking advantage of a company natch. They glide to match the Target Income Fund, which is 30% stocks, 7 years after the retirement date. 02% fee and a US small cap index fund (0. Vanguard's super basic index fund with target retirement date, plus my 401k is also target date index funds. you don't have 10% bonds, the fund does). Hey, I’m once again trying to figure out how to do this. Hi u/CogniZENsible, happy to assist with your Target Date Fund questions. This year vanguard converted a significant portion of target retirement 2045 while rebalancing , which shows up as capital gains. meaning if you're 50 years from retirement, they'll invest in more higher risk/higher return, and then when you approach retirement, they'll switch to lower risk/lower return investments. Personally I consider VOO obsolete in any account where you aren't limited to a short list to pick from. Your Targeted date fund date of inception is around 10%, the S&P 500 Index is 11. ), (FIRE) with a focus on the UK. You shouldn't expect to outperform the S&P 500. I'm young (32), so I could go all in on things like VOO, VUG etc, but I'm a bit of a paranoid person, too, so I like knowing I also have some slightly more stable target funds. I max out my companies match on the 403b but I am trying to decide what to do after that. A good 3 fund portfolio will be basically the same as a target date fund, but with more control. Target date funds typically start with 10% in bonds at the beginning which is pretty conservative in your 20s and 30s. If I were you I would sell all of my target date funds and stick them in VOO and never look at it again / continue to add to it. Market fluctuations will play a very small roll. r/FireIndia is in blackout as protest against Reddit's policy changes killing third party apps. I just finished the total money makeover book and Dave mentions that these target date funds usually underperform. BlackRock LifePath Index 2065 Fund BlackRock LifePath Index 2060 Fund BlackRock LifePath Index 2055 Fund BlackRock LifePath Index 2050 Fund Vanguard's target date funds are essentially index funds. I'm wondering if I should put them in Index Fund ETFs. Next you say you want target date funds, but they have a much higher expense ratio than a s&p 500 index fund from either company. In the very long run, target date funds tend to have lower returns than 100% stock funds because bonds are included. I feel that even at the start that target dates generally are too safe. I am looking to move them into something else if it makes sense ( seeing mixed bag of literature on whether or not to keep target date) wanted some advice from others who have gone through the motions already. The target date funds available to us are of the “Wells Fargo Target 20xx CIT Class E3” variety. Vanguard's target date funds, for example, consistently have 60% of their equities portion allocated to U. For example Target 2040 SWYGX (index fund) vs Target 2040 SWERX (fund) have very different expense ratios. Doesn't seem like letting them manage it is worth it, so I'm debating between the last two. The L2065 that OP is in will only be ~5% bonds 25 years out from the target date, and will be ~22% bonds 15 years out from the target date. and international funds in a 60-40 balance require rebalancing? I’m looking to add a target date fund to my Roth IRA. This means there is not a trading fee or a sales load to the fund. ) I just bought VFFVX which is Vanguards target date fund with a 0. However you will usually under perform with a target date fund because it contains some ratio of bonds, target date funds are almost by definition a more conservative vs First of all, I really hate being stuck with one brokerage and buying mutual funds, but I guess that’s the thing with target date funds - you can’t move them to another brokerage. Doesn't keeping the underlying U. I always thought target date funds were, an easy way to simplify retirement investments . Set a reminder on your calendar to just check on it once a year or so to make sure the fraction of your ownership that is in each fund is about what you want. I’m not a fan of Vangaurd’s interface and would prefer to pick either a Schwab or a Fidelity target date fund so I can keep all my other investments on a modern platform as well. My entire 401k is in a target date fund. We've all been where you are - the appeal of True, investing in target date funds is a decent plan, and we can’t let perfect be the enemy of good enough, but it’s important to understand what you’re giving up — and what I have posted the asset allocation for both the 2025 Target Fund and the 2025 Retirement Fund. A good Target-Date fund like Vanguard's or the Fidelity Freedom Index series are good enough for nearly anyone inside a tax-advantaged account. 09%. However, ETFs do not get taxed when stocks leave the fund. 00 to 0. I have weighed the pros/cons of a Vanguard Target Date Fund vs doing it fully myself. ) Fidelity Freedom Index 2025 has ~47% bonds. I have an investment account with Wealthfront and a 401k and IRA with Vanguard. Those dividends will be used by your target date fund to buy more shares of the companies, and that's another way in which your target date fund will grow its value. In you guys' opinions, would you switch or just it is fine staying in my target date fund ? A index target date fund is perfectly serviceable for most people. They do this by investing in bonds and international stocks in addition to US stock funds like S&P 500 index funds. Okay first - stocks should NOT be compared to target date funds. In fact, there were some recent nasty surprises for some people holding Vanguard target date funds in taxable accounts because of capital gains. Get the Reddit app Scan this QR code to download the app now. What does the index fund charge? If the index fund is much cheaper - I’d tell you that you should pick the index fund BUT there is a lot to learn so as others have suggested it’s a wise choice to get 90% of the decisions right by picking a target date fund and evaluating once you know more. Currently I am using the Vanguard Institutional 500 Index Trust. Target date (index) Target allocation (index) VT/VTWAX If you are ok with 2 funds, pair VXUS with VTI. If you are young there is no real material difference in target date funds with a 30 year time horizon. Switch Target Date Funds? Hello, friends. I looked into the fund and saw exposure to a lot of international stocks in developing markets. It's not rocket science. Even if I wanted to FIRE at 40, I'd buy the target date fund for me at age 65. What would be a good plan with these options available? Tier 1: Passive Target Date Funds. Long term, it's ok. I don't know who is saying target date funds are the worst. I think going 100% Vanguard Target 2065 in your IRA is a great idea. Within my Fidelity 401k plan, I have the option of choosing between about 20 different funds. For say Vanguard, people in their 2065 target date are 56/34/10 in US Total/International Total/Bonds respectively right now, for 2040 target date it’s 48/30/22 right now (this is what the 2065 fund should be like in 15yrs, so in 2080). also, target date funds change over time, I agree that sometimes an active target date fund is the best option in a 401k when there are no other options. When I opened a separate Brokerage account for investments (no tax advantage), by instinct I contributed entirely to the same VFFVX (Target Date Fund 2055). 5 of them are target date funds Skip to main content Open menu Open navigation Go to Reddit Home Man, I guess I’m lucky. 7%. The target date fund comprises ~90% stocks and ~10% bonds. Sadly there aren’t any total us or total international funds to choose from either, though Fidelity’s S&P500 index fund is an option. When I look at the investment objectives for both funds on the T. I’m still pretty new to all this. I contributed to VFFVX (Target Date Fund 2055) for Roth IRA for the last several years. Is there any point to having different retirement vehicles in different target date funds? I do both. With the choppy stock market I have noticed my moderately risk fund is doing better in 2021 (-2. Here's the full listing, if anybody is interested: 4062 Voya Fixed Account (4062) BONDS target date funds invest in risk appropriate stuff. My company’s 401k is through Fidelity too and my target date fund has a 0. VTI or Vanguard Target Date Funds? 2021 was a great year for my portfolio and finally started getting into my FIRE journey and investing. You'll have a list of funds, you pick a 3-fund portfolio once and forget it. 38 y/o wondering about Fidelity’s freedom target date funds vs freedom index target date funds. So I got automatically enrolled into a Target Date Fund by my employer in my 401K. If you want a little more control you can do a 3-fund portfolio (basically what the target date fund is doing under the hood) and shift your asset allocation as you please. Your post is totally misleading though. The fact that you're even thinking about it means you're gunna wanna mess with it - which is fine! Rebalance it yourself as you get older. Wow - I wish my TDF had an ER of 0. Target date funds are one way of investing in index funds. The fees are high, close to 1%. While we are unable to provide any recommendations, we can provide some information about target date funds to help you decide which fund to choose. it can differ depending on which exact tdf. 06% expense ratio. 09! Mine ER is 0. I think I pay 0. The fee is quite a bit more than let’s say VTI or SCHD. Basically the downside to VT (or the portfolio I described) versus a target date fund is that you need to remember to add bonds at some point. I’ve been investing in target date funds for 10+ years in my 401ks. Thanks, TRowePrice TDFs are the only TDFs present. Target date 2020 from Vanguard is 46% stocks. & international). Then, if the fund NAV goes down a little the displayed "total gain" can look pretty bad, but if you looked at the IRR of the cash you put in it can be pretty good. If you’re just starting to invest, I recommend popping over to r/personalfinance. So whether the fund holds bonds has nothing to do with how it gets rebalanced, only when it gets rebalanced (i. So what’s the argument to do anything other than a target date retirement fund (assuming an expense ratio For instance: my 403b is managed by a company that charges . They are both set to target date funds. r/Fire My current 401k with a target date fund of 2060 has 30% allocated to short term reserves. There's a lot in those funds compared to how much people at my age - and older - have in retirement. You don’t have to make perfect choice, because you can move your funds later. What does everyone think about Vanguard’s target date retirement and life strategy funds? I’m trying to simply my Roth and my taxable (12-15 goal on taxable) and was curious if anyone else had gone this route? The target date funds which Bogleheads like are composed of index funds. Much better to just My current university has the meaningfully-more-expensive-but-not-extreme American Funds Target Date Retirement Fund (RFITX; ER =0. Most of my retirement money is on a 401k Target Date Fund (over 55 so I could withdraw it without any penalty), just received the dividends for the year and it is a value that would cover my expenses for the year, I was thinking of keeping the number of shares constant (in my case 45k) and try to live on the dividends alone, I know that the distributions can be variable year by year Depends on what you’re looking for. Just like the title says, my Roth IRA (Vanguard) and 401k (Merrill) are currently in Target Date Funds. 15%. Not sure how good that is but I also see I got an option to invest in S&P 500 Index fund also. If you don’t like the bond allocation at any given time and are still working change your allocation to a 2070 target date fund when it’s available. Setting too early a date will result in very conservative allocation and not Luckily, there are Lifestrategy Funds that keep you in the same allocation if you want to use a single fund strategy. The nice part about the target date funds (if you find this nice), is they slowly transition to less risky investments closer to retirement. I want to save into an account that I don’t have to actively manage, hence why I chose a target date fund. Maybe they're talking about crappy ones in a 401k with bad fund choices? Would it make sense to split my yearly contribution in half and invest some in the TDF and the other in VTI for example? Target date funds are great if you just wanna set it and forget it like most people. The question is, what do you think your stocks/bond ratio should be now, and what do you think it should be in retirement? Ex. 5-. I personally don't like target date funds because the bond allocations are way too high, and Dave agrees with that. I have a Roth ira with fidelity and I’m 21. If not, there's nothing particularly wrong with having some money in a target date fund as long as the fund itself isn't terrible. But they don't, they apply in that year, and every future year for the rest of your life that you have the money in the target date fund. But absolutely nothing wrong with a target date fund. The 500 fund from fidelity is a I have spent quarantine just trying to learn about investing and have read Bogleheads Guide to Investing. I was looking at the target date funds out of curiosity and found 2 funds that I was comparing Schwab's SWNRX and Vanguard's VFIFX. What TDFs do is weigh risk. I recently finished reading books recommended by this group, which I now highly recommend as well (Boglehead's Guide to Investing, The Simple Path to Wealth, and The Lazy Person's Guide to Investing). With this being said I might switch over to 2055 Contrary to what some people on Reddit believe, target date funds are actually aggressive investments that focus on growth during the early years. 01% in their broad index or bond funds. They are very likely the best choice for non-savvy investors with simple portfolios. 06% for the ETFs of the standard three fund portfolio. That could be a good thing (adjusting asset allocation to better fit your personal risk profile) but could also be a bad thing (deviating from market weights in some unwise way). You want enough growth to have your money last until you die. What are the Get the Reddit app Scan this QR code to download the app now. I've been in the TSP since the start, although the individual funds have different start dates. Should I look into a mutual fund for my Roth IRA? I just feel super overwhelmed. Thinking about the merits of a 3-fund portfolio versus Target Date Fund strategy. Other TDFs do it differently, though - Schwab’s start at For many years, we've been mirroring Vanguard's Target Retirement Funds using ETF versions of their holdings and updating the ratios during our yearly contribution and rebalance to our tax-deferred SEP/Roth accounts. 12%. I personally think Target date funds hold to much bonds that someone in their 20s or 30s don’t need assuming a retirement age of 65 years old. If the market tanks in the next year or two, you might have the opportunity to change it without tax consequences. I'm 100% Target 2055 in my IRA (I'm 34). . I’m a Fidelity gal gasps so I’m not sure of the Vanguard equivalent but I have choices between Fidelity “Freedom” target date funds or index ones. I agree that people should consider target date funds. The funds to stay away from charge 1% and up. S&P is the top 500 companies in the US on the NYSE. I had finally made up my mind that the Target Date Fund was a better fit for me due to not wanting to deal with rebalancing/tax loss harvesting right now. Historically, I've always bought mutual funds (essentially the one that follows the S&P 500 for my trading bank), but I was wondering if I should also invest in a target date fund to slightly diversify my investments. They're bad, tend to have poor returns, and sometimes high fees. Target date funds from Vanguard include US total market (of which, VOO makes up roughly 80% by weight) and a total international market component (of which, contains VWO). I'm using 80% C Fund and 20% S Fund to try and match VTI, which is the Vanguard Total Stock Market Index Fund ETF. so target date funds could outperform, but it's hard to say. From a 10 year return standpoint, VWNEX does slightly better. I don’t like target date funds in my fidelity 401k. It will be heavily weighted to fixed income. Essentially they're there, you just might not be able to see them. At this point the difference between a 2065 target date fund and 2070 target date fund is negligible. Or Example: If I would like to retire in 2030 and if I had been investing in the Target date 2030 mutual funds (VTHRX, FXIFX etc. This is based on proportions in target-date funds; I opt out of bonds, which it sounds like you’re comfortable doing as well based on the VT suggestion. Same for VWO. In this situation, what Get the Reddit app Scan this QR code to download the app now. For people in their mid 40s who are ~5-10 years away from RE, what are your thoughts on target date fund vs SP500? We are standard-FI or even chubby-FI now, but didn't RE yet because we enjoy the work and we thought we can increase the chubbiness / Personally, I'd leave it there and figure out what to do moving forward. Unlike some other index-fund-based target date funds, Schwab includes a small allocation towards REITs. The point of a target date fund is to balance risk. Also, when it comes to a target date fund, accounts aren't managed individually, but accounts merely have a certain number of shares (i. I think it is simpler to stay with the Vanguard target date fund (I would stay with it if my ER was that low) - but to change your bond allocation over time you could change the target date (example change to 2050 to decrease bonds, or 2030 to increase bond percent) and switch into a different fund. Vanguard offers cheaper “Admiral” shares of most of its funds if you have at least $3,000 in the fund. This is your retirement account you’re talking about, save the riskiness of equity for personal investing (which you should also be doing). Most FIRE people aren't super bond heavy and don't drastically change their asset allocations when they retire. Although some types of bonds are very risky and can diversify a portfolio without reducing expected return, bonds as a whole have lower expected return than stocks as Target date funds aren’t great for growth, but they are less risky than other funds. However, the funds held by the Target Retirement funds are NOT the cheaper Admiral shares; they are the more expensive Investor shares. Target Date Fund is fine for everyone, but mix-maxing is still valuable when you're talking about ~$1-2 million. So, for example, VTHRX has positive returns for 1 year, 3 yrs, 5 yrs, 10 yrs and so forth. S. Where target date funds do their work is when you are in your 50's approaching that target date. 0425%. The cost is that in order to guarantee that date, you traded off potential returns in stock, in the scenarios where the stocks didn’t crash right before the fixed retirement date. I have the option to change to growth, moderate growth, conservative growth, and a bunch of other named funds. ummm generally speaking target date funds mirror the market, but are a little bit safer than a straight up nasdaq mirror type of fund. The supposed benefit being that they are more diversified and might not have as high of returns during good times but protect value during down turns. Lesson learned: market crashes will test your risk tolerance, and Target Date Funds are great at keeping you from panic-adjusting your allocation. Search instead for Fidelity Freedom Index [Year] Fund For instance, FFIJX is their 2065 target date fund with an expense ratio of 0. You may want to check out a multi-asset fund like FFNOX. My Vanguard accounts only purchase target date funds. They are made up of a combination of total stock market index funds (both U. That fund is down 24% in the past year, lost all of its 3 yr gains, and is now priced under its original inception price. However, it doesn't show me the rate of return since I opened the 401k which was around 2017. Target date funds are not the worst thing in Vanguard Target Retirement 2060 is Vanguard's most aggressive Target Date fund as of right now. However, I'm not sure if target date funds are the best route for this type of account? I opted for VFFVX instead of the VMFXX. Fidelity Freedom Index 2045 has ~10% bonds Hi Bogleheads. Fortunately, my 401k, which was a much larger part of my retirement savings at the time, was in a target date fund so I didn't touch it. 5% without. Late 20s, I started putting money into index funds when I was 23. Of these, Schwab has the cheapest funds; the Schwab Target Index series has a very low ER of 0. 09 is the That's a personal decision. Fidelity's target date funds (TDF), known as Fidelity Freedom Funds, are no transaction fee mutual funds. Fidelity's index-based target date funds have an ER of 0. Everything prior to those years in your 20's, 30's 40's there is not much going on with a plan target date funds. The consensus was it was a set-it, forget-it solution where I dump $6K each year (Roth IRA) into a Vanguard target-date fund and, since I'm in my early twenties, by the time I'm ready for retirement it should, god willing, be worth over a million. I had a portion of my money in a target date fund because it's what was available, and I just really don't see why it matters that the value is "less volatile" compared to an index fund 10-20 years Set up a target date fund for the year you turn 70. The target date funds are good for my peace of mind while the other mutual funds are good for more rapid increases (and possibly rapid decreases). I can manually construct the US total market with index funds, but the international choices (outside of the TDF at least) seem terrible. Does anyone know what the general differences between the two are - I get the index target date fund likely closely tracks the S&P. For a 529 plan, do people typically use target date funds? I’m trying to figure out if it’s better to choose the college date as the target or push it out quite a bit because it is different than a retirement account. Target fund expenses are typically higher than single funds. wklxocnx hahkl kiihr yjibow pvoxa jijwir srey qmqqwua wrs fopi