AlanS,
I am 70 and own Target Retirement 2025, a 60/40
stock to bond mix. This fund is in my wife's IRA and
in our after tax fund. I am using value tilting index
funds in my IRA at a 60/40 mix to balance the
Total Stock Market Index funds in the 2025 funds.
My wife is 8 years away from "required minimum
distributions" and gets glassy eyed at this kind
of discussion so, for her sake, I am keeping her
IRA and our after tax fund dirt simple. Since I
am in the RMD stage, I recently decided to switch
out of 2025 to all index funds in my IRA to better
manage withdrawals. We are withdrawing from
my IRA at a 6% rate or 4.2% from the total portfolio.
In case I need a drool cup prematurely or step in
front of an 18 wheeler, I have instructed my wife to
switch back to the 2025 fund.
We are taking a tax hit in the after tax 2025 but it
should be a relatively safe investment for the next
30 years and provide a nice nest egg for our brood.
We hope to avoid any withdrawals from this for at
least 20 years.
At this stage in life, I like the way the 2025 becomes
more conservative with time, especially if I am not here
to mother hen things. You can always spice things up
with stuff like REITS, small cap value, large value etc.
but the target retirement funds are a good core holding,
IMHO. If you like a non changing allocation, then
Balanced Index or one of the life strategy funds might
suit you better. Managed funds like STAR, Wellington
and Wellesley are also excellent.
Cheers,
Charlie (aka Chuck-Lyn)