This was a great breakdown, I like to manage my portfolio myself and allocate to my financial goals. I am a moderate aggressive investor plus I'm 30 with a long time horizon so the Target date fund is to conservative for me.
I have a targeted fund n I chose 2030. I chose a year far beyond my actual retirement date. It was set up in 2000, it was performing well till, of course, this last year. Looking at it now, it’s pretty scary. 😬 wasn’t intending to withdraw from it till then, or even later, so I’m hoping it’ll bounce back.
Great presentation But as somebody who wasn't 100% stocks in there 20/30's, it worked out for me. That just happened to coincide with the Lost decade (2000 to 2010). Funny thing now in my 50s I went to 100% stocks. Of course now my portfolio is large enough where I can take that risk
I’m looking to switch out of my Vanguard Target Date Fund in favor of separate index funds. I’m a newbie, does anyone know how to do this? Do I “sell” the target date fund, move the money to the federal brokerage account, and THEN buy the other funds? Thanks in advance.
If I already am in a Target date fund, can you explain when it's a good time to switch to mutual funds instead, since switching is selling the target date fund mutual funds and buying my choice of mutual funds. I know it's not always a good time to sell. Thanks.
So since I'm in a target fund 401k fund now, should I changed them all to my own allocation? They would have to actually sell them and then buy right? My luck they would sell when low and it would go up before they by them back. So I hate to move my entire amount from target to self allocated.
As always, you can manage risk by dollar cost averaging. Rebalance away from the target fund a portion at a time. Even if you get hit by a hypothetical market drop, you still have a majority of funds not impacted. Also its not terribly rational to fear this when a target date fund already has this risk from its rebalancing.
I see no purpose at all for us to hold even 1 bond, today or ever. Situationally based, of course. I have a 27-year military pension/VA disability package and my wife will have a 20-year Federal Employee pension. She's 39, so still 11 years to work and then she will defer until she's about 60. I'm 49, so during those 10 years where we only have my retirement we will execute Roth conversions across all our 401k assets. We're currently in the high 24% bracket, but will be down to the 12%, using today's rates. If we add social security we will have an annual income of roughly $170K using today's dollars ... before we need investments. Our pensions are protected for inflation, as each increases per CPI-W each year.
Great analysis! Thanks for sharing!
This was a great breakdown, I like to manage my portfolio myself and allocate to my financial goals. I am a moderate aggressive investor plus I'm 30 with a long time horizon so the Target date fund is to conservative for me.
Glad it was helpful!
I have a targeted fund n I chose 2030. I chose a year far beyond my actual retirement date. It was set up in 2000, it was performing well till, of course, this last year. Looking at it now, it’s pretty scary. 😬 wasn’t intending to withdraw from it till then, or even later, so I’m hoping it’ll bounce back.
Great presentation
But as somebody who wasn't 100% stocks in there 20/30's, it worked out for me. That just happened to coincide with the Lost decade (2000 to 2010).
Funny thing now in my 50s I went to 100% stocks. Of course now my portfolio is large enough where I can take that risk
With stocks down 40 - 50% every 7-10 years, I doubt there is a magic formula. A lot depends on where you are in your life cycle of investing.
You mean the S&P is 40-50% what 2012 or 2014 now?
I’m looking to switch out of my Vanguard Target Date Fund in favor of separate index funds. I’m a newbie, does anyone know how to do this? Do I “sell” the target date fund, move the money to the federal brokerage account, and THEN buy the other funds? Thanks in advance.
If I already am in a Target date fund, can you explain when it's a good time to switch to mutual funds instead, since switching is selling the target date fund mutual funds and buying my choice of mutual funds. I know it's not always a good time to sell. Thanks.
So since I'm in a target fund 401k fund now, should I changed them all to my own allocation? They would have to actually sell them and then buy right? My luck they would sell when low and it would go up before they by them back. So I hate to move my entire amount from target to self allocated.
As always, you can manage risk by dollar cost averaging. Rebalance away from the target fund a portion at a time. Even if you get hit by a hypothetical market drop, you still have a majority of funds not impacted. Also its not terribly rational to fear this when a target date fund already has this risk from its rebalancing.
I see no purpose at all for us to hold even 1 bond, today or ever. Situationally based, of course. I have a 27-year military pension/VA disability package and my wife will have a 20-year Federal Employee pension. She's 39, so still 11 years to work and then she will defer until she's about 60. I'm 49, so during those 10 years where we only have my retirement we will execute Roth conversions across all our 401k assets. We're currently in the high 24% bracket, but will be down to the 12%, using today's rates. If we add social security we will have an annual income of roughly $170K using today's dollars ... before we need investments. Our pensions are protected for inflation, as each increases per CPI-W each year.
Did you say Veteran Affairs? Good luck.
Target date funds seem to have high fees.