Target Date funds

[dademos04]

I am a newly invested DIY investor. I am 38 years old and hoping to retire by 60. All debt payed off (no mortgage/still renting/divorced but no split of retirement accounts and one 18 mo old child). I have a 342K salary and have recently maxed out my retirement accounts as follows:

1.) 403(b) employee/employer match at roughly 23.5K/year RFHTX Target Date fund 2045
2.) Roth 403 (b) at 20.5K/year RFHTX Target Date fund 2045
3.) 457 at 20.5K/year RDHTX
4.) Roth IRA 6k/year Vangaurd Target date fund

Currently, I have my investments sitting in target date funds listed above. The 457 plan thru AIG sits at a costly .8% ER but the fidelity is around .35% (My 403 (b) is with fidelity. Options thru AIG are not great but I can invest in the Vanguard Total Stock Mkt Idx Instl Pls (VSMPX) for a very cheap at 0.02% thru AIG. My thought was to put all of my AIG investments into VSMPX and then rebalance my portfolio using stock/bond options in my fidelity 403 B accounts as well as ROTH IRA accounts and save my separate brokerage account to that I have for stock mark VTI index fund with a goal of an 80/20 split on stocks and bonds in total. I would change my fidelity investments to include

• • VANGUARD INST INDEX
    VANGUARD INST INDEX (VINIX)
• Stock Investments - Mid-Cap
  • VANG EXT MKT IDX INS
    VANG EXT MKT IDX INS (VIEIX)
• Stock Investments - International
  • VANG TOT INTL STK IS
    VANG TOT INTL STK IS (VTSNX)
• Bond Investments - Income
  • VANG TOT BD MKT INST
    VANG TOT BD MKT INST (VBTIX)

I was wondering if this is worth the hassle and if I am handicapping myself with the use of target date funds.

Thanks,

A curious young investor.

[StateOfMyHead]

I'd keep it as simple as possible. To avoid having to research, select and re-allocate in our multiple employer retirement accounts we do target funds but extend10 years farther than we plan to retire in an effort to be a little more aggressive. In taxable accounts we do VTSAX. In old Roth IRAs and individual 401k we do stock market and REIT index funds which I watch and re-balance if indicated q 6 months.

[artemis]

Nothing wrong with favoring the simplicity of target date funds in your retirement accounts right now; since trades in retirement accounts have no tax implications, you can always trade out of them down the road if you decide they no longer meet your needs. Just don't hold target date funds in taxable accounts! You risk the possibility of a big distribution on which you will owe capital gains if the fund rebalances (as a lot of Vanguard investors recently discovered to their horror).

[Larry Ragman]

Those ER’s are a bit high but not awful. Personally, and I say this as a Vanguard target fund investor, with your options I’d seriously consider the lower cost funds. Here us the key thing: Make sure you set your asset allocation across all of your accounts together. Otherwise you risk an unintentional overweight in some sector or another.

[KDoc]

Those ER’s are a bit high but not awful. Personally, and I say this as a Vanguard target fund investor, with your options I’d seriously consider the lower cost funds. Here us the key thing: Make sure you set your asset allocation across all of your accounts together. Otherwise you risk an unintentional overweight in some sector or another.

I'm running into this issue as I look to rebalance my entire portfolio (personal IRA, spousal IRA, taxable, and 401k) as my 401(k) is in a Vanguard 2050 Target Date fund. With this fund allocation %'s set by Vanguard and unable to be changed manually I feel it is limiting my option for asset allocation and asset location not only for this but other accounts as well. What tips/tricks have you used to mitigate this issue.