Schwab Thomas Partners for retirement

[target2019]

This is accurate. My goal is to have the simplest, yet most profitable type of retirement account possible, something I can confidently ignore most of the time. I am very appreciative that I now know for sure that the guy from Schwab was hoping to lead me in a direction that was not best for me, but I'm still not sure if I should change what I've got or just keep it as is. If anything, I'm thinking maybe the 2030 fund should be merged into the 2035, since I don't plan to start accessing that for another 12 years, and maybe I should just leave everything else as it is? I did move some of my regular savings into a money market fund so hopefully it will earn more than the 0.0whatever it was making and when my CDs mature, I'll probably be able to make a better decision with that money too now.

I guess the other thing weighing on my mind as far as long term planning is that I'm thinking of changing my job situation since the stress is making me feel very unhealthy. If/when I do that, I'll need to roll my 401k over. I suppose I'll move the Roth part into my Roth IRA and the traditional part into my Vanguard 2035 tIRA.

I must say, it's really awesome to see people that don't even know me taking an interest and giving helpful input into my situation, especially since most of you are far better off than me, so thank you.

1. Assuming the funds are at Vanguard, you're thinking of exchanging the 2030 fund shares for more shares in the 2035 fund. The effect on the next 12 years will come from a shift of 6% in equities in that 12% of your portfolio. It will have a significant effect over 12 years. (I personally would accept that risk.) Essentially, more risk *should* bring more reward.

2. We have a new-to-this-analysis account, namely the 401(k). You could go back to the original table you posted, and add that fund(s) to the table. Then recalculate the percantages. What to do with the 401(k) after a job change is something for the future, but not a big worry right now. What is in the fund is worth thinking about, though.

Profitable? Yes! https://www.thesaurus.com/browse/profitable

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[indiajust]

I really like rolling things under my own Roth/IRA, so I would push back against putting your IRA into the employer based Vanguard fund. I will echo BubbaChris comment on not being a priority to a former employer and perhaps getting stuck with fees or service problems. More choices and less regulatory environment also.

I suggest you look at the ETF's and funds that constitute the 2030 and 2035 target date funds. They will be the same, but in a slightly different allocation. "rolling" from 2030 to 2035 is really shifting the differentials between the allocations. A subtle difference.

 

[thepalmersinking]

I've had my IRAs in target funds at Vanguard for years. That seemed like the safest choice since I don't have a grasp on how or what to invest in on my own, but the returns are really small. I talked with one of the Vanguard advisors a year or so ago since I was thinking it would be worth paying someone to help me, but she actually sounded like she knew less than I do, which is really bad for someone in charge of other people's money.



I talked with someone from Fidelity last week, but he left me feeling confused and didn't seem too enthusiastic or patient with my questions. Also, the closest office is hours away, so it would essentially be all online as well and I'd probably still just go with target funds.



Today I met with an advisor at Schwab. He reviewed the robo advising (SIP), the managed portfolio and Thomas Partners (TPI). He indicated he thought TPI would be best for me. There's a .90 fee for dividend growth or .80 for a balanced income plan for less than 500k. I'm thinking that even after paying his fee, I'd still probably be better off since a real person would be managing my money, yet I'd still be able to monitor things on the web site and have input if/when I wanted it. He seemed pretty confident he can get me better returns that the target funds I've got now, which I believe.



I like that it's a real office near home with a real person I can talk with. He's owned the franchise for years and seems willing to be actively involved in managing my account. Additionally, he will give me a 700$ bonus for transferring the funds from Vanguard and he offers monthly classes on a variety of topics related to finances and retirement. I would probably also transfer most of my emergency fund from my bank since I could get a better rate with Schwab's money market, and he said he would help me set up a brokerage account and show me how to purchase individual stocks and monitor them as well. I'm really interested in that since I'd like to learn to be more active in decisions regarding my financial future and that seems like a good starting point. I'd even like to teach my grandkids eventually so they are encouraged to be active in their financial future early in life (unlike grandma).



Keeping in mind that I truly have very little understanding of how/what to do on my own, please tell me what you think. Are there any big red flags that I might not be seeing? Thank you for any input you can offer.

My Schwab advisor offered the advice. I compared, as much as possible, on using VYM and SCHD instead and tinkered with historical data and didn’t see the point in it.

 

[Smilinggirl]

***Update***

Well life has changed for sure in the past few months. I had a health scare (thankfully nothing that seems like it can't be fixed) that was the final straw so I decided to go ahead and retire. It would have been nice to cushion my nest egg a little more, but what's the point of having money to grow old with if I don't get the chance to grow old?

I rolled my 401k over into my IRA, but I still think I need to adjust my holdings. According to Vanguard, I'm at 79% stocks, but I should be closer to 60%. Maybe I should trade some of my target retirement for Index funds? I currently have 78% in a traditional IRA, broken down as 10% VTHRX, 22% VTTHX and 46% TRRJX. The other 22% is in a Roth IRA VTTHX. I'd really like to get this figured out, then only think about it once in a while so I can keep focusing on being healthy and enjoying life.

I don't plan to start withdrawing from my retirement accounts for roughly another 13 years and I'd say I have a moderate risk tolerance. As always, I appreciate any help you can offer.

 

[target2019]

You have 74% in equities now. I could be wrong.

In tIRA sell two funds and purchase VTTHX - Vanguard Target Retirement 2035 Fund. That is what you should have for 13 years from now. It will slowly step down the equity percentage.

Leave the Roth as is (if you'll tap it in 2035). If you think you'll keep it for many more years before using, then you need a target fund that is further into the future.

Here is a spreadsheet you can save and edit.

https://docs.google.com/spreadsheets/d/1iWmNyYVQjheOVh_OtKnXEZh7kY8mox1sTAeia7el9lo/edit?usp=sharing

 

[Smilinggirl]

Thank you target2019 for coming back and following up. Life has been a bit of a crazy mess lately, but I've finally set aside some time to address my long term financial needs. I was able to exchange the Vanguard 2030 for Vanguard 2035.

I don't know why I didn't consider that the Roth target fund could be 2040 since I won't touch it for at least that long (and more likely longer), but on the surface, that seems to make sense.

I'm torn between exchanging the T Rowe 2035 for Vanguard 2035 or perhaps a different kind of fund. The Vanguard STAR fund was previously mentioned, but once I make that decision and take action, I can take a breath and focus on health and wellness.

I can't tell you how much I appreciate the input I've gotten here. Thank you all.

 

[target2019]

T. Rowe Price Retirement 2035 TRRJX
https://www.morningstar.com/funds/xnas/trrjx/portfolio
Expense Ratio 0.590%
Equity 77.93%

Vanguard Target Retirement 2035 Fund VTTHX
https://www.morningstar.com/funds/xnas/vtthx/portfolio
Expense Ratio 0.080%
Equity 69.27%

If you look at the various tabs (open in two tabs or windows so you can switch back and forth) you see that TRP outpaced VTTHX in the max years chart. But the reason for that is that they individually have different equity ratios.

So, even though thwy are "2035 funds" they are significantly different. Look at the Risk tab for each fund.

You can go back and forth between the fund pages for more understanding.

For ME, I have no interest in Target funds, and the reason is that the expense ratio is higher than my DIY approach.

But for YOU, find what factors are most important. The TRP 2035 is actually more equivalent, IMO, to Vanguard Target Retirement 2040 Fund VFORX (76.3% equity). I don't mean to confuse you, but I bring this up, as there is ALWAYS more to consider. You just need to determine what's most important for your future.

All of your thinking on this is understandable. STAR sets you at 60/40 starting right now. The fee (0.31%) is less than TRP, but more than a VG target fund.

Take your time.

 

[dobig]

Yearly gains of the S&P 500 which you can get with the investment SPY or a number of other S&P tracking funds. You'll be hard pressed to consistantly beat these gains as 85% of money managers do not.

https://ycharts.com/indicators/sp_500_total_return_annual