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The Target Date Retirement fund from your preferred low cost fund provider (i.e. Vanguard, Fidelity, Schwab, iShares, etc) is an excellent choice.
by khuey 1y ago
The Target Date Retirement fund from your preferred low cost fund provider (i.e. Vanguard, Fidelity, Schwab, iShares, etc) is an excellent choice.
- citizenpaul 1y ago>Target Date Retirement fund Every-time I look at those they seem extremely risk adverse for such a long term investment. Sometimes with 50%+ bonds/notes. If you are looking to retire in 5 years sure but I'm guessing most HN are hoping for more than 4% returns on their retirement account 25+ years from now.
- khuey 1y agoAre you looking at ones with retirement dates well into the future? The one Vanguard suggests for people born in 1990 (VFFVX) is 90% equities.
- citizenpaul 1y agoIt seems I only looked at 401k options for target-date type which are apparently universally terrible. I never looked at private ones because of this bias.
- deleted 1y ago[deleted]
- mandevil 1y agoVanguard Target Date 2045 (suitable for someone born in 1980, looking to retire in about 20 years) is, as of September 2024, at 50.3% Total US Market Institutional Shares, 33.2% Total International Investor Shares, 10.9% Total US Bond Investor, and 4.8% Total International Bond Institutional. Fidelity's 2045 fund is even higher in the market, they are 10% bonds and 95% equity (they appear to be levered by 5%).
- citizenpaul 1y agoITs been a while. I'm referring to the ones that have been presented for choices in various 401k's over the years. Those ones always seem quite terrible. I basically just ignore them now. There may be others that I've not seen outside the the restrictions of 401k's. Maybe I should take a another look and update my knowledge on them.
- mandevil 1y ago401(k)'s almost always have terrible choices for funds, because of the principal-agent problem. The agent of the company makes the choices on what funds are available but it is the principals as employees who pay the fees. In half-a-dozen career stops over 20 years, I've seen good fund choices in the 401(k) maybe twice? Which is why whenever I leave a job I always roll it over into my trusty Vanguard IRA as quickly as I can, and get to have my choices for funds. (401(k)'s and IRA's are treated differently in a divorce, which fortunately has not been a problem for me, otherwise having a IRA is so much better than a 401(k). If it wasn't for the employer matching funds I would never do a 401(k) and just do a IRA.)
- citizenpaul 1y agoCool so I'm not mistaken but I overgeneralized my thoughts that there are no good target date funds. Just the 401k ones suck, so I learned something. >I always roll it over into my trusty Vanguard IRA Same.
- liveoneggs 1y agoThe target date fund glide path: https://institutional.vanguard.com/investment/strategies/tdf-glide-path.html https://institutional.vanguard.com/investment/strategies/tdf... tl;dr at age 40 (90/10) it starts increasing bonds until age 60 (60/40); age 65 (50/50), and then 72 (30/70)
- citizenpaul 1y agoIt seems I only looked at 401k options for target-date type which are apparently universally terrible. I never looked at private ones because of this bias.
- toast0 1y agoIf you're investing in a taxable account, Target Date funds might be less preferable than holding the underlying funds (or similar funds if the underlying funds aren't available). Vanguard recently made changes to their target date funds that resulted in a lot of redemptions and extra costs to those holding these funds in taxable accounts.