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Target date retirement funds with 1% fees

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  • Target date retirement funds with 1% fees

    The bulk of my 403b money is currently in a Principal target date fund with a 0.99% fee. As I'm trying to figure out my retirement savings strategy, I'm discovering that's really high and will eat a significant chunk of my investments. I have the option of putting the money into some Vanguard funds with much lower fees (and maybe others too, I haven't clicked through to check on all of them). I'd like to avoid having my money eaten up by fees, but at the same time I feel like I have little to no understanding of how to portion things out to different funds for the right risk/growth balance. And I have little appetite for doing this over and over again so that my money is safer and safer as I get to retirement. FWIW I'm in my mid 40's and plan to work another 20 years. Is there a "make your own target date fund" recipe somewhere that could tell me how to do this once every few years so I can angle for the better fees? Or is it just worth it to accept the 1% fees so I don't mess it up?

  • #2


    go there. you can have people build you 10 portfolios out of the goodness of their heart. then post the same info here and get 10 more ideas.


    it is not worth it at all if you have vanguard index funds available.


    while a TDF takes a minute to manage every year, a portfolio split up take maybe 10. if you can do medicine, you can do this.


    • #3
      The Vanguard site will tell you the composition of the Vanguard target date funds. So if you want to retire in 20 years, go to the target 2035 or 2040 funds and match the current allocation in the target funds with Vanguard funds in your 403b. If you posted the fund options and expense ratios, people will likely give you their opinion on which funds to chose if there isn’t perfect overlap between target date fund composition and the options in your 403b.

      A 1% fee is high enough that you should do this yourself assuming other options have low fees.


      • #4
        Won't take much effort. You could probably rebalance yearly and adjust your allocation every 5 years to match Vanguard target. Keep a simple 3 fund portfolio.

        Would take you 2 hours a year. You save $4000 per hour spent (0.85% savings on 1000000 portfolio yearly). Now is it worth your time and effort?


        • #5
          You can get an allocation here:

          Expenses are something you can control so you should be mindful of what you're paying. Even more important is what you contribute. Make sure you're maxing that account out.


          • #6
            I took the questionnaire and it recommended 100% stocks.  Interesting.  I don't disagree with that outcome, but I was surprised.