Hello All,
I've been allocating around 15% to a 2055 target date fund (JLKYX) which is around 260k now. The ER looks to be at 0.65% according to their documentation. Is it worth it to move funds to the vanguard index funds? The 2055 is the cheapest target date fund they offer. Currently looking at retirement in about 25~ish years. I don't have anything in an IRA currently since I just set my 401k % and didn't mess with it over the years (income 125k currently).
Here are my current cheapest options:
Vanguard Intermediate Term Bond Index Fund (Admiral Class) 0.06%
Vanguard Value Index Fund (Admiral Shares) 0.05%
Vanguard Growth Index Fund (Admiral Shares) 0.05%
Vanguard Mid-Cap Index Fund (Admiral Shares) 0.05%
Vanguard Small Cap Value Index Fund (Admiral Shares) 0.07%
Vanguard Small-Cap Growth Index Fund (Admiral Shares) 0.07%
Thanks for any help!
Switching 401k from target date to index fund?
byu/LogicalMachine inpersonalfinance
Posted by LogicalMachine
5 Comments
TDF are more expensive because they’re managed for you.
So you need to decide if thats ok, and you never have to worry about rebalancing.
Or go cheaper, and you’ll need to rebalance yourself, closer to retirement.
Neither is better, its more preference for convenience.
If you choose non-TDF:
Vanguard Growth Index Fund (Admiral Shares) 0.05%
then later on you can rebalance into
Vanguard Intermediate Term Bond Index Fund (Admiral Class) 0.06%
If thats literally all you have, thats pretty limited. No total market or international, so the growth index is best.
You should also absolutely open a Roth IRA as well.
I personally don’t use target date funds. With that array of index funds I’d do Growth and small cap. And add some international – I would think your company probably offers something. My own portfolio is 80% s&p, 7% international, 7% company stock, and the remaining international. Bogleheads advice would be a bit different – really depends on your risk appetite.
TDF are usually conservative and you still have a lot of runway so I say go for it. Not familiar with those vanguard options but look for something similar to their SP500 fund
Do they not have Vanguard Total Market Index? If they do, get that.
Target date doesn’t make any sense.
Just buy sp 500 and breathe easy