Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

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CoastLawyer2030
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Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by CoastLawyer2030 »

Due to most of my retirement assets being linked to my employment, the majority of my assets are at financial firms other than Vanguard. I also have my Roth IRA, Traditional IRA, and brokerage at Schwab because I like their website's functionality and the easy/instant linking between checking/accounts.

As of right now I am basically 100% SP500 or Total Stock Market in all of these accounts. Everything except my wife's IRAs (which are at Vanguard) does not have a "Total World" fund available.

The closest thing I see is target date 2065 funds. The Schwab 2065 fund is SWYOX. That has a 0.08% net expense ratio and invests in 56% domestic equities, 33% international equities, 5% real estate, 5% bonds, and 1% other. I think that is pretty close to the diversification one would want with either the three-fund portfolio or VTWAX.

My only issue with these target funds is that they invest in bonds more and more over time. I have an aggressive risk tolerance and would not mind being 100% equities.

Is trading the target date fund every five years (2065 --> 2070 --> 2075) every five years a good, lazy workaround to not being able to buy a total world fund? In case it is not clear, I have no interest in re-balancing or doing any of that. Just want to set it and forget it, and make an easy change every five years.
Silk McCue
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by Silk McCue »

Inside a non Taxable account that is a perfectly reasonable approach to satisfy your stated goals.

Cheers
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retiredjg
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by retiredjg »

Your plan should work but it probably does not have to be every 5 years because many of the "new" funds are all at the same AA anyway. Meaning, do check at 5 years but you don't necessarily have to move yet.

Don't do this in a taxable account though.
averagedude
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by averagedude »

This is sound strategy to maintain an aggressive asset allocation. I have recommended this strategy to people who use target date funds.
Triple digit golfer
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by Triple digit golfer »

Are there no international equity index funds available in any of your or your wife's accounts?
Topic Author
CoastLawyer2030
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by CoastLawyer2030 »

Triple digit golfer wrote: Sun Jan 23, 2022 11:37 am Are there no international equity index funds available in any of your or your wife's accounts?
My wife's Vanguard accounts are in VTWAX.
Topic Author
CoastLawyer2030
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by CoastLawyer2030 »

Silk McCue wrote: Sun Jan 23, 2022 11:18 am Inside a non Taxable account that is a perfectly reasonable approach to satisfy your stated goals.

Cheers
retiredjg wrote: Sun Jan 23, 2022 11:25 am Your plan should work but it probably does not have to be every 5 years because many of the "new" funds are all at the same AA anyway. Meaning, do check at 5 years but you don't necessarily have to move yet.

Don't do this in a taxable account though.
Yes, I read the WSJ piece and saw the forum posts here about the tax implications here. I think this year I will be able to put funds in a brokerage, I am thinking just a Total US Index?
Triple digit golfer
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by Triple digit golfer »

CoastLawyer2030 wrote: Sun Jan 23, 2022 11:46 am
Triple digit golfer wrote: Sun Jan 23, 2022 11:37 am Are there no international equity index funds available in any of your or your wife's accounts?
My wife's Vanguard accounts are in VTWAX.
So why not put them in VTIAX and use VTSAX for yours and get to Total World that way instead of holding 10% or so in bonds that you don't want?
Topic Author
CoastLawyer2030
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by CoastLawyer2030 »

Triple digit golfer wrote: Sun Jan 23, 2022 12:27 pm
CoastLawyer2030 wrote: Sun Jan 23, 2022 11:46 am
Triple digit golfer wrote: Sun Jan 23, 2022 11:37 am Are there no international equity index funds available in any of your or your wife's accounts?
My wife's Vanguard accounts are in VTWAX.
So why not put them in VTIAX and use VTSAX for yours and get to Total World that way instead of holding 10% or so in bonds that you don't want?
The English language is not robust enough to describe how lazy I am to try and accomplish this. I basically want one investment across all accounts until I am 50ish. I do not want to worry about X investment here and needing to do Y investment there.
Triple digit golfer
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by Triple digit golfer »

CoastLawyer2030 wrote: Sun Jan 23, 2022 12:29 pm
Triple digit golfer wrote: Sun Jan 23, 2022 12:27 pm
CoastLawyer2030 wrote: Sun Jan 23, 2022 11:46 am
Triple digit golfer wrote: Sun Jan 23, 2022 11:37 am Are there no international equity index funds available in any of your or your wife's accounts?
My wife's Vanguard accounts are in VTWAX.
So why not put them in VTIAX and use VTSAX for yours and get to Total World that way instead of holding 10% or so in bonds that you don't want?
The English language is not robust enough to describe how lazy I am to try and accomplish this. I basically want one investment across all accounts until I am 50ish. I do not want to worry about X investment here and needing to do Y investment there.
Fair enough!
Silk McCue
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by Silk McCue »

CoastLawyer2030 wrote: Sun Jan 23, 2022 11:47 am
Yes, I read the WSJ piece and saw the forum posts here about the tax implications here. I think this year I will be able to put funds in a brokerage, I am thinking just a Total US Index?
Many use Total US and Total International in their taxable brokerage accounts.

Please take a look at the Wiki.

https://www.bogleheads.org/wiki/Tax-eff ... _placement

Cheers
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retiredjg
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by retiredjg »

If you want to use target funds in your tax-advantaged accounts, does the target fund have the amount of international you want? If yes, use both total stock and total international in taxable.

If the target funds have too much international, just put total stock in taxable.
buyer
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Re: Keep Trading Target Date Funds Every Five Years (To Maintain Close to 100% Equities)?

Post by buyer »

CoastLawyer2030 wrote: Sun Jan 23, 2022 11:47 am I think this year I will be able to put funds in a brokerage, I am thinking just a Total US Index?
Consider doing all VT in your taxable if you want the simplest way to achieve 100% equities with total world diversification. No rebalancing needed, set it and forget it.
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