Author Topic: Target Dates Funds  (Read 1683 times)


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Target Dates Funds
« on: September 21, 2018, 01:13:13 PM »
New to the forum. I'm 47 work in Education and have been saving / investing for a solid 15 years now. Background - My wife and I hope to retire at 62. We both have a great pensions with our employer and expect to get about 50% of our current salaries when we retire, these investments are in addition to our pension pension and would supplement our pensions.  My wife and I make about $175,000 per year pre tax. We have about $450,000 invested mostly in Mutual Funds. Up until this summer we had most of the money in American Funds accounts and they performed very well for me. I tend to be fairly conservative financially and the Target date fund (Vanguard 2030) made some sense at the time - especially with my concern about a recession coming.

Through my employer we have to use a 3rd Party Adminstrator to invest via payroll deductions into 403(b) / 457(b) accounts. Therefore we use Edward Jones. I've been very happy with our advisor over the last 10 years. However, when we had our semi annual meeting in July I feel like he talked me / sold me on Target date Funds. I can't shake the feeling that I was sold too instead of presented options to choose from. I can't stop feeling like it's a bad decision.

I work a ton and have a 12 year old son who is active in sports, so I do not have a ton of time to research every option. I have looked into Target date Funds and I guess they are okay - But would love to hear other idea's of safe investments with good returns and/ or who I can turn to for advise.

Thank you


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Re: Target Dates Funds
« Reply #1 on: October 22, 2018, 05:49:01 AM »
Curly, sorry that this is a later response so you may have gotten good advice elsewhere.  As for Target Funds, the general consensus I have read online is that they are good for an individual who doesn't want to stomach a ton of volatility and just set it and forget it.  The reason being is they automatically re-balance into more bonds and conservative investments as you get closer to your retirement date (in your case 2030 for the target date of your fund).

The only negative I've seen is the expense ratios tend to be a tad higher than if you built out the allocation yourself using Vanguard funds based on the allocation of the fund.  The trade-off is you would have to manually re-balance every year to get to a more conservative asset allocation.  Even with the higher expense ratios, they are significantly lower than an active managed fund.

Sorry to hear you felt like you were sold on them and pushed onto you, but they aren't the worse things have sold on you.  Based on you having a 12 year old son active in sports and you working a bunch, I could see why your adviser recommended them as it would naturally get more conservative for you without your intervention. 

Hopefully this helps.
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