What’s wrong with putting all your money in Vanguard Target Date Funds? Just tired of picking and trading stocks in Robinhood. Already have some money with Wealthfront and don’t want to keep paying commission that is more than TLH.
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Mutual funds have some not so great tax implications. There are target date ETFs too. I don’t know if Vanguard has these but ishares does. Other than that, target date funds tend to be more conservative in their allocation which may or may not be what you’re looking for.
Target funds generally include stocks and bonds. Some people have bad opinion on bonds and suggest to invest in them only when you are coming near to retirement.
Nothing wrong fundamentally but think of funds that ended in 2022-2023. Target date funds go bond heavy towards maturity and many were left holding bonds that were heavily discounted because of interest rate hikes. Just know this when investing.
Never buy target date funds in taxable accounts because when the target date arrives, lots of people sell and it triggers taxable events. It's perfect for 401ks though.
Is that true? The point of those funds isn't "withdraw at the point in time" but rather "this is your intended retirement date and we'll balance the portfolio to manage growth/risk profile to match." That would imply you still hold and sell as needed, but you're not vacating the fund entirely
If others sell, the fund has to sell underlying assets and that triggers a taxable event for everyone else. With these funds you don't want to be the last person holding the bag because you're footing everyone else's tax bill who exited before you. I'm not 100% sure but I believe being in a non-taxable account mitigates this problem.
Nothing wrong. You can get a slightly lower management expense ratio by buying the two underlying funds directly and managing the ratio of stocks to bonds yourself You could even use the target fund as a guideline and make the adjustment annually to mirror it The slightly higher expense ratio paid them to do that
Personally I prefer not to use target date funds because I'd rather manage my asset allocation myself. Need more international? Cool, VTIAX instead of VTSAX until the balance is right. You can also hold high distribution funds in tax advantaged accounts. High growth funds in Roth to try and increase tax free withdrawals later. https://www.bogleheads.org/wiki/Tax-efficient_fund_placement
In theory I want to put bonds in my traditional account, highest growth in my Roth and long term capital gains / low dividends in my taxable (and not cash it out until I retire). In practice though there is a benefit of having fixed income in a taxable account - namely it doubles as my emergency fund
You are wrong if it’s after tax - you are inviting a tax bomb that will hit in days or weeks when they send out the taxable distributions. Get out of it now and into VTI and VXUS
Thanks, no can do- wealthfront uses the ETFs and if i end up buying outside of wf, my TLH will be disallowed…