Choosing a Target Retirement Fund

[Chaos Abounds]

I tried searching for an answer to my question but couldn't find what I was looking for. If this has been asked and answered before I apologize and would appreciate if you would point me to the thread.

But, here is my question: I have a question about choosing Target Retirement Funds. If I planned to retire at age 65 I would choose the Target Retirement 2025 Fund. But if I wanted to retire early, say age 55, should I choose the 2015 fund instead or should I still pick the 2025 fund? Why or why not?

 

[Rich_by_the_Bay]

Chaos, the years are arbitrary but the closer the target date to today, the more conservative (bonds:stocks) the asset allocation. You should target the closest target fund to your retirement date if you are happy with the allocation Vanguard has arbitrarily set for that fund.

Regardless of your actual chosen retirement year, if you want to be a little more aggressive than Vanguard "thinks" you should be, then choose a target year farther out than your actual retirement, and vice versa for more conservative.

 

[Dawg52]

I tried searching for an answer to my question but couldn't find what I was looking for. If this has been asked and answered before I appologize and would appreciate if you would point me to the thread.

But, here is my question: I have a question about choosing Target Retirement Funds. If I planned to retire at age 65 I would choose the Target Retirement 2025 Fund. But if I wanted to retire early, say age 55, should I choose the 2015 fund instead or should I still pick the 2025 fund? Why or why not?

I would think you would stay with 2025 even if you retire early. You are buying a fund like this more for your age than the actual date of retirement. Retiring at 55 means you need your money to work for you for many years, therefore you need more in stocks in the early years and less as you grow older. Thats the theory anyway.

 

[Bestwifeever]

Someone on this board suggested laddering the Target Retirement funds starting with the year you're planning to retire and then out from there, e.g., 1/3 in 2015, 1/3 in 2025, 1/3 in 2030 (or something like that).

 

[Chaos Abounds]

Thanks for the info. (Sorry, I should have said that earlier)