Do I consolidate????

[tominboise]

I have some of our $$ in Fidelity Freedom 2020, 2025 and 2030 funds. All together it adds up to about 13% of our total investments. They all seem to be performing about the same. Should I consolidate them over time into one fund?

I am 18 months, approx, from pulling the plug. Overall AA is 65/30/5 on our investments.

[HI Bill]

I don’t see the point in having three different target retirement date funds. Assuming they are all tax-deferred, why not roll two into the fund that most closely matches your desired AA?

[HI Bill]

Quote:

Originally Posted by HNL Bill I don’t see the point in having three different target retirement date funds. Assuming they are all tax-deferred, why not roll two into the fund that most closely matches your desired AA?

2030 has an expense ratio of 0.7%. 2020 is 0.61%. These are both quite high for a target date fund. Why not buy several index funds with lower ERs and save yourself some fees while being able to create your own AA? I sold my target date funds when I realized I could recreate them with VG fund with ERs of 0.01 to 0.05%.

[OldShooter]

I would not consider Fidelity for managed funds of any kind. I used to think fairly highly of the company, but then I read this: https://www.reuters.com/article/us-funds-fidelity-retirement-special-rep/special-report-fidelity-puts-6-million-savers-on-risky-path-to-retirement-idUSKBN1GH1SI "Fidelity puts 6 million savers on risky path to retirement"

[Al18]

It makes sense to consolidate into one target date fund. The Fidelity Freedom Index 2025 Fund may be a good choice, with an expense ratio of 0.18% with the symbol FQIFX

[bingybear]

Quote:

Originally Posted by tominboise I have some of our $$ in Fidelity Freedom 2020, 2025 and 2030 funds. All together it adds up to about 13% of our total investments. They all seem to be performing about the same. Should I consolidate them over time into one fund? I am 18 months, approx, from pulling the plug. Overall AA is 65/30/5 on our investments.

I'll bite. Why do you have target date funds. The whole idea of a target date fund is that you let it run and it will shift your allocation to more bonds as you age. But you have most of the allocation controlled by the size of the rest of the portfolio.

Figure out what asset allocation you want over all. Sell the target dates and just deploy the money in the rest of your portfolio. You're wasting the fees on the target date funds as you aren't using them appropriately.

[tominboise]

All good advice. The targeted year funds were chosen at the time because it was easy to do. So I am taking the steps to consolidate and move these funds into index funds with lower costs and in line with my AA.


Thanks to all who replied.