how is the Vanguard Target Retirement funds?

[dooo42]

looking to move my roth from ameriprise to vanguard. just started reading a few books on mutual funds but want to get my stuff out of that place asap. is the vangard target retirement funds a good place to start? i guess it's like all in one fund.

mark

 

[travelover]

If you want a hands off investment, the Target Funds are a good choice. They come in different stock / bond allocations (different by target year), so check that to make sure you are comfortable with the particular one you choose.

 

[Alan]

If you want a hands off investment, the Target Funds are a good choice. They come in different stock / bond allocations (different by target year), so check that to make sure you are comfortable with the particular one you choose.

They are each a fund of funds. If go over to the VG site you can see exactly how they are structured.

https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList

For example, here is the 2040 fund

https://personal.vanguard.com/us/funds/vanguard/TargetRetirementList#targetAnchor

 

[samclem]

is the vangard target retirement funds a good place to start? i guess it's like all in one fund.

Yes, this would be a very good choice. As travelover recommended, look over the various target year asset mixes and pick one that has the right percent of stocks vs bonds for you.

You can leave your money there while you learn more about investing. You might decide, after reading a bit more, that you'd like to invest in some slightly different things, and you can do that. But I believe that if you just stuck with the single Vanguard target retirement fund and did nothing else until you retire that you'd get better investment results than the vast majority of individual investors, even ones who spend a lot of time chasing the latest "hot" investment trend.

 

[Nords]

Boy, this seems to be the "I hate Ameriprise and love Vanguard" month. People must be taking a new look at their portfolios and their "advisers"...

 

[Amethyst]

The closest we have ever come to Ameriprise is going to one of their free dinners! Which, by the way, was held at the best restaurant in town, and filet mignon was on the menu. We enjoyed it, even the presentation on annuities I thought of "youse guys" several times during that presentation

Amethyst

 

[travelover]

The closest we have ever come to Ameriprise is going to one of their free dinners! Which, by the way, was held at the best restaurant in town, and filet mignon was on the menu. We enjoyed it, even the presentation on annuities I thought of "youse guys" several times during that presentation

Amethyst

The closest I came was a free review of my finances on the promise of a free companion airline ticket. The kid I talked to knew less about finances than me, wanted $800 for a "plan" and the terms and restrictions on the "free" companion ticket made it unusable by anyone but a masochist. Other than that.....wow what a business!

 

[martyb]

We have our Roths in Vanguard's 2015 retirement fund. I did switch them a little while back (earlier this year) from the 2020. Current 12 month performance for DW's is 14%, mine is just under 12%. I didn't switch them at the same time, therefore the difference.

 

[Focus]

I have all my 401(k) savings in a Vanguard target retirement fund, because of its low expense ratio and the fact it contains funds I can't otherwise access within the 401(k).

A couple of things to keep in mind:

Vanguard is in the process of replacing the target retirement funds' separate foreign index funds with the Vanguard Total International Stock Index Fund, which I consider an improvement, and increasing the percentage allocated to international stocks. (See this Vanguard page for details.) So, what you view now under the target retirement funds' "Portfolio & Management" tab on the Vanguard site will be changing.

Also, target retirement funds are designed, ideally, so the one you pick will be your sole fund. But that's not likely to be the case for most people -- especially those who, for tax purposes, do not want to have any bond funds in their taxable account . That's another reason to pick a target retirement fund based on its current asset allocation rather than the retirement year. You'll want to pick one that, combined with your other investments, will bring you to the overall asset allocation you want now, knowing that it will automatically increase the bond portion as the years go by.

 

[Lusitan]

Vanguard Target Retirement funds are a great place to hold all of your retirement savings, or to hold as a base and then tweak with the addition of other funds to suit your particular goals. They are certainly a good place to park your money at Vanguard while you read up on things and figure out your preferred asset allocation etc.

Apart from the "hands-off rebalancing" concept (that over the years will slowly move the money in your Target Retirement fund away from stocks and into bonds) there is also the "I don't want to look!" rebalancing that takes place with large market swings. As the market tanked in 2008/2009, my Target Retirement fund was busy selling bonds and buying stocks on the downswing to keep the asset allocation in line -- something that frankly I did not have the guts to do myself, but which in retrospect paid off as the market rose.

Target Retirement funds are also a good way to save on fees because you can have exposure to several of Vanguard's index funds without needing to meet the minimum balance requirement for each of them.

Hard to go wrong with the Target Retirement funds ...