Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at


Gordon Robinson from NC posted over 5 years ago:

I agree with relatively high stock allocations of Target Retirement Funds at the age of 65 such as the Vanguard Target Retirement Fund 2015 with 56% stock because of increased life expectancy and inflation.
However, I am a Boglehead ( follow and contribute to the blog site, people who follow John Bogle, founder of the Vanguard Group) and many of them are very risk averse, not only in believing in only index funds but also in asset allocation using bonds ("age in bonds" up to 80% at 80.) Many would not consider entering retirement at 65 with a 60% stock portfolio. When all the Target Retirement Funds you used as examples went down 38 - 43% in 2008, how do you ameliorate these peoples fear of volatility and get them to "stay the course" in a Target Retirement Fund?
That exact topic is the topic that is the subject of the Coastal Carolina AAII meeting on Wed Oct 10. Gordon Robinson

Charles Rotblut from IL posted over 5 years ago:

Vanguard announced this morning that it is changing the indexes it tracks for many funds, including its target date funds. The company is hoping to reduce transaction costs by doing so.

The press release can be read on Vanguard's website at:


Michael M from IL posted over 5 years ago:

I'm 85. How do I find out how I would have made out if I used a Fidelity Freedom Fund if I had started at 62 when I retired?
Where should I go now?

James Selva from NY posted over 5 years ago:

Iam in the vanguard retirement income target fund witch has 65% bonds with a turation of 5.5 years the total bond fund could really get hit with a loss if a bond bubble happens as many are saying iam thinking about moving to the 2015 target with more stocks? will the income target fund lower their bond duration?

Melvin Rosen from WI posted over 5 years ago:

Vanguard's target retired fund is 30%stock allocation.
One can easily duplicate their allocations concepts as suggested but this is difficult with less choices in retirement funds.
Suggest that you roll-over your fund immediately on retirement to an account where you can control allocations. The involvement keeps you thinking and exercising your mind.

Earl Mitchell from CA posted over 5 years ago:

I wanted to see how well a target dated fund did versus a S&P 500 and Small Cap fund over the same period of time. So I moved IRA money into all three after around 2009. As of last month the target dated fund gained 22% versus 50+% for S&P and 60+% for Small Cap. I ended that experiment and moved my money out of the target dated fund. No thanks.

One thing I'd be worried about with target dated funds is that the company will funnel your money into their lower performing funds or ones that have higher expense ratios. It's the same kind of game they played with limited number of funds they sometimes offer for company 401K plans (i.e. only giving you the choice of their dog funds not the best ones).

Vaidy Bala from AB posted over 5 years ago:

After reading this article, I understand the fund gives about less than 3 % return overall (bull or bear market) with a minus of about 1.5 % of taxes, the returns is my cash flow. Is it worth all this bother?

Fletcher Cole from NH posted over 5 years ago:

Does the target fund investor incur two sets of fund expense ratios? If the target fund has an expense ratio, and the target fund invests its assets in other mutual funds within the fund family, it would seem as though the fees are layered. Can anyone comment on this?

Charles Rotblut from IL posted over 5 years ago:


Since target date funds are comprised of funds from the same fund family, the answer is no. You are paying a single fee to the fund family.


Tony Hausner from MD posted over 5 years ago:

what puzzles me is that most if not all target funds are inappropriately structured as far as i understand. They all favor large cap over small cap and growth over value, whereas research favors the opposite over the long term. even the federal tsp is this way. what am I missing.

Tony Hausner from MD posted over 2 years ago:

As I stated two years ago, most target date funds are structured inappropriately in my mind. They favor large cap and growth instead of small cap and value. I have heard that Wells Fargo follows the model that makes more sense to me. I also wonder if these funds should be shifting to bonds as much as they do when one gets closer to retirement. Given that many of us live to 85 or 90, I think we may need the funds more heavily invested in stocks for a longer period of time.

Ed Ward from Georgia posted over 2 years ago:

Would not the investor in target date funds suffer management fees in the net return/loss of the fund as they would in any fund. And when the fund managers invest in other funds which themselves have management fees would not these fees reduce returns yet again. And since the target date fund invest in funds of the same family is that not a practical conflict of interest. Are not the managers of each of the funds subject to the control of the management of the fund family. Why not simply invest in no-load index funds to the extent of the risk of your total investments you are comfortable with.

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