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Target Date Funds and FIRE
Old 10-11-2017, 03:58 PM   #1
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Target Date Funds and FIRE

I FIREd about 5 years ago and am reviewing my Asset Allocation Plan. I use 4 simple broad funds in my brokerage account and Vanguard Target Retirement 2035 Fund (VTTHX) in my various IRAs (Rollover, SEP and ROTH). I've been very happy with the simple portfolio and automatic rebalancing of the target date fund. My SWR from Brokerage and Rental property income covers our expenses, but plan to start drawing from the IRA in about 10 years.

My question is around the Target Retirement fund. I selected 2035 because that would be about my 'traditional' retirement age. But I feel I should be more conservative with this money since it is 'locked up' until I can begin making withdrawals and I'm not in the accumulation phase as someone with 15+ more years of w*rk.

Should I continue to use 2035 as the target? Maybe move to an early target (59 1/2)? Or move all the way to the Target Retirement Income Fund with its landing AA of 30/70 that Vanguard uses for all Target Date funds?

How do you handle investing funds that are unavailable during the early years of your retirement?
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Old 10-11-2017, 04:20 PM   #2
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That's a tough one because we all have our own risk thresholds. The typical advice is to be more aggressive with your money if you have a long time horizon because the peaks will overcome any down period. Timing the market can be riskier than leaving it alone.

On the other hand, many are saying we are due for a big correction to the market. If you believe that to be true, this could be a good time to pull back with a more conservative horizon.

Both methods should get you success in the long run.
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Old 10-11-2017, 05:45 PM   #3
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You are sneaking up on an important fact about target date funds: The target date of your fund does not have to be your retirement date. It should be later if you want to be more aggressive and it should be earlier if you want to be more conservative. No angst necessary.
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Old 10-11-2017, 08:13 PM   #4
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Pick the AA you're comfortable with and look for the fund that matches that.
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Old 10-11-2017, 08:34 PM   #5
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Originally Posted by GravitySucks View Post
Pick the AA you're comfortable with and look for the fund that matches that.
Further to that, look at your overall AA, rather than the AA of any one portion of it.

Also consider tax consequences. Some funds kick off more divs and cap gains, those might be best in a tax deferred account.


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Old 10-12-2017, 04:54 AM   #6
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You are sneaking up on an important fact about target date funds: The target date of your fund does not have to be your retirement date. It should be later if you want to be more aggressive and it should be earlier if you want to be more conservative. No angst necessary.
+1. TD funds are merely a matter of risk/allocation you want to take. You're free to buy any TD fund for any year.

Personally, I put money into a 2015 (my original planned retirement year) back in 2005 but recently I found the glide path returns too conservative and moved to a 2025.

For a lot of people a TD is simply an easy way to find a good allocation.
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