Related Posts
Bowl Leader
More Posts
Visual Storyteller
Additional Posts in Personal Investment Chatter
Conversation Starter
Conversation Starter
Should I buy Everi stock?!
Conversation Starter
Is rocket mortgage good? Please help!
Rising Star
Conversation Starter
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
Most of the target funds are heavily large cap until you hit your 50s anyway
Chief
Never. Even at retirement I will still have a 30 year time horizon to use up those funds.
Chief
Yes, it’s not like you use all your 401k funds the year you retire. It’s different than saving to pay for college or to buy a house in which all the funds are used in a short period of time. With retirement, even after you retire, you still have decades to continue to keep your money invested.
I have never used a target date fund, but think they are a very good option of the expenses are low. The reason I don’t use it, even though ours are very low expense, is that I look at all accounts in my portfolio together and it would be difficult to balance if I used target date funds. If you have a decent bond fund in your 401k, you can just add that to your current fund and get more conservative without target date funds.
To actually answer your question, if you plan to switch to target date funds, there is no reason to wait. Just depends if the ratio of funds in the target date is what you want.
Rising Star
With a little education and effort, you could easily pick the funds you want and not have to “trust” a target date fund. I don’t think I’ve ever used a target date fund, save for maybe my first 3 to 5 years out of school when I didn’t understand investing or large cap vs small cap vs. bonds.
Never
Chief
Only used them for a couple years when I hadn't tried to educate myself yet. Now I would not use them.
Chief
Same reasons as EY1 and spm1. I can come up with a mix of etfs on my own that represent the allocation that I want. I will be invested long past retirement age, so a conservative portfolio won't be needed until well into retirement.
I only used a target date fund if that was the employer's only option. Once I left that company, I rolled my funds over to Vanguard so I could invest where I want.
Rising Star
Fees are typically higher vs doing it yourself.
It’s also a blunt tool, that might not suit your personal situation.
It’s good if you intend to buy fixed annuities at retirement, but not suitable if you expect to continue investing after you retire.
As long as you are working and have some investing education I would not use them. When you retire you may want to use them as a set it and forget or when you are starting out and not very educated on investing you may want to use them.