December 12, 2014
What is a target date fund? What questions should you ask before buying one? Where can you find them?
What is a target date fund? What questions should you ask before buying one? Where can you find them?
A target date fund is a low maintenance mutual fund. You should ask yourself does it have the right ratio of stocks and bonds your looking for. If you are a higher risk invested you might want to invest in more stocks than what a target date bond has. You might want one because it is berry easy to manage and you don’t need to do any maintenance on it. You can get them at a very affordable rate at vanguard.
A target date fund is usually a group of mutual funds that change asset allocation the closer you get to the target date on them, with the current year ones being the most conservative. Things to look at when you want a target date fund is what the yearly cost is for the fund. Not all target date funds are index funds and you need to know the difference. You can get them at Vanguard or your employers retirement plan. Target date funds are for people who want to buy this one fund and be done with their stocks, they will not have to manage their asset allocation themselves. You typically do not get any discounted rates for having extra in a target date fund such as at vanguard which does not offer admiral on them.
Well said, gentlemen. I have nothing to add. Great job!