I was being sarcastic but I guess what I’ve heard before is you could end up paying an expense on the overall fund, plus expenses on each of the funds that are invested within the fund. Maybe I misunderstood or maybe that’s exaggerated.
I guess it's two different use cases though. Target date funds are good for individuals who plan on reallocating every so often. If you're all in on total market, this might not really be necessary. Just takes the hassle out of reallocating manually and, likely, doing so incorrectly.
There’s a 99% chance I misunderstood. This came from a guy I worked with a while back and he just mentioned it in passing. This was before I really paid any attention to it (other than just set it and forget it TDF). He could have just meant that they typically have a higher expense ratio.
I googled it and found some random CNBC article and this is what it says (and what I was thinking of) Lastly, target-date fund fee structures can be quite complicated to understand. Target-date funds have both a management fee and a fund-of-funds management fee, meaning that your target-date fund portfolio has multiple mutual funds within it, each with its own expense ratio.
Vanguard forever is the broader point. Think my expense ratio on my brokerage account is like .04 currently.
Smaller company? Total plan asset size has a lot to do with retirement plan expense ratios. We’ve got Fidelity Freedom index funds for 8bps, which is the lowest commonly available. Recently found out there is one firm out there that is able to offer those funds at 6bps. As a plan fiduciary, that’s put me in an interesting position.
Maybe I’m missing something but it looks like all of the Vanguard TDR funds I can get are 0.055% which is much lower than expected.
target dates are ok for folks that don't have any inclination to pay absolute any attention - but I'd still rather see participants buy a balanced fund instead - just because you've retired doesn't necessarily mean you need less stocks - folks are living longer and retired for longer - I think TDFs get you too conservative too quickly Also - from fund family to fund family the allocations can be wildly different - which is fine - but Fidelity's tend to lean stocks for longer than any others - so you have to have some understanding of the operating philosophy of the allocation set up
Target date funds are shit, that’s just my opinion. When thinking about your retirement funds people should try to understand the 101s of investing.
as somebody who's been in the business a long time - I can tell you that at the employee level - you're in the top 5% of people if you care about investing at all - you're right to think they're shit if you are personally taking the time to understand it or seek advice - but most folks man - for them - getting them investing and keeping them in is the primary concern - and step out of the way and try to not make good the enemy of best
team most people can handle like 80/20 well into retirement. probably even 90/10 in early retirement gotta be able to stomach the waves though
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf this is a good tool if you're helping older folks with finances
what withdrawal % you using in this scenario because sequence of return risk is a real hazard, whole lotta folks in that allocation went broke after 8-10 years who retired in the 90s and early2000s between dot com crash and then 08
Kind of hyperbole, I think the failure rate of a ~3.8% SWR was like 1% of simulations if you retired at the peak in the late 90’s on a 30yr period at like an 80/20 or even 90/10. Now massive drawdown yes, but I don’t know what “whole lotta” means. But yes the 2nd worst financial decade of all time did stress retirement accounts greatly. Edit: 4% SWR has failed 3% on 30 year periods since the Great Depression at 90/10. 2% at 80/20. These numbers also assume you never adjust cost of living or find additional income.
also to state the very obvious i have no expertise in anything im just a dude who reads stuff but using that little vanguard calculator i posted if you can't handle like 95% probability of having enough money you might be too conservative social security and medicaid can help with that 5%
it’s not hyperbole, the average withdrawal rate recommended by the industry back then was 5-6% the white papers since 08 have knocked the rec to safely retire down to 4 good luck getting the average American to be able to fund retirement at 3.8-4% WR
playing with that tool often you can just jack the mix up to 80/15/5 and have near zero change in probability overall but your upside explodes
4% + social. Doable, not lavish but doable. 5% since the depression only failed 4% at 80/20 with no supplemental income or cost of living adjustments. Using a 60/40 didn’t even move the needle, only reduced 5% failures by .05%. Trinity study came out in the late 90’s.
https://www.etfcentral.com/news/warren-buffett-90-10-etf-portfolio guys i didn't realize i just discovered an old established retirement strategy the fun part of being ignorant
https://www.dinkytown.net/v3/989469/RetireShort.html I’ve avg 17% return the last 13 years with Nasdaq etf’s. This calculator gets extremely grim if I use their 7% avg return until retirement. Over 30 years a 17% avg return is 6x a 7% return. Most of the guys I work with have left their money in the 7% return balance pooled account. They have more faith in our local pension than I do.
This defaults to 4 percent return while in retirement which is very low unless you changed it. Just fyi
I used 8% after retirement. The 7% set point before retirement hurt my soul too. I might keep rolling with the 17% Nasdaq after retirement. This money is supplemental to my local pension. Being able to withdraw 10-12% of a few million without touching principal is wild to think about.
It’s been a wild ride sometimes. My yearly avg’d return since 2011 has been 17%. Settling for 50% of that will be a tough pill to swallow.
To me, the 4% SWR is good information to have based on past results to prepare for worst case scenarios if you’re someone who is irrationally scared of running out of money. The fact is, 4% withdrawal leaves the large majority of cases with more money at death than they started with at the beginning of retirement. If you get unlucky with sequence of returns early in retirement, you might have to make some adjustments and spend a little less for a few years. People also don’t account well for how much less they’re gonna spend late in life. My dad and mother-in-law are both in the upper 70s, and they simply don’t need a lot of money or want to do that much anymore that costs a lot. I’m a risk-averse person and will probably over save myself and have way more than I need. If you’re that kind of person too, I highly recommend the book Die with Zero. It’s definitely not for everyone, and more geared for super savers. It makes a ton of good arguments and gave me a different perspective on a few things. Highly recommend.
I'm shooting for 3% before I retire. With 4% real in the stock market I think I'll get to my target in 12 years or so.
I don’t have either. Per Google the ticker is VFFVX but that shows an expense ratio of 0.08%. All of the Vanguard Target Dates offered by my 401k (through Voya) have that 0.055%
I have never actually seen video of her or really know a lot about her, but I can tell she's someone I hate based off how her hands look in just about every picture I have seen of her
Old Cathie been waiting 15 months for deflation. Mama capitalism was convinced companies would have to lower prices instead of gauging us and using shrinkflation.
I feel like they’re just a dogshit company in general but perhaps they have such a stranglehold on the market it doesn’t really matter.
It’s a good thing they took a completely well-run business and started searching out non-union states to set up shop in.
Day 150 of my realizing I’m never gonna get a “good” entry price on the 15% of my portfolio in treasuries.