VFFVX Vanguard Target Retirement 2055 Fund vs rebalancing and Betterment

[antonjames]

Dear all,

I am a lazy set and forget investor so I usually don’t get around to rebalancing.

So when I came across the Vanguard VFFVX Vanguard Target Retirement 2055 fund it seemed that this was a way to have rebalancing done automatically  and it would also fit my risk profile as I moved through the years. (I kinda like working so I won't be retiring anytime soon)

For this reason this is where I put most of my money these days and I currently have around $100,000 invested in it.

I am curious is there anyone else in the community which has come to this conclusion?

I am now also looking at using Betterment as MMM recommends. Does anyone have any thoughts on how just investing the VFFVX compares with using betterment?

Many thanks and much appreciated!

[MotoMM]

For what it's worth, yes, most of our IRA money is in far future dated Vanguard target retirement date funds.

We have also some real estate, and one of our 401k plans doesn't offer a retirement date fund so that's all in an S&P 500 index fund.

[kuzinrufus]

Vanguard's target date funds are all pretty good choices for one-stop-shop set-it-and-forget-it retirement savings. Although I would argue that if you put your money in their Balanced Index Fund (VBIAX) you're going to end up with a very significantly larger chunk of money in the end. The 2055 target date fund has an expense ratio of 0.15% while the Balance Index Fund's ER is 0.07%. Maybe someone with better math skills than me can run the numbers, but I've heard lots of people who are smarter than me say that (seemingly) small differences in ERs add up to reeeeaaaally large differences over long periods of time. Like hundreds of thousands of dollars!