Hi, I'm new to investing (started late in the game last year in my late 30s). I am hoping to retire in around 18 years and I am planning on maxing out my IRA and 457B for the next 18 years.
I currently have all my investments in Vanguard Target Retirement 2050. I love the ease and simplicity of this (especially considering I'm new and inexperienced with investing and really like the hands-off approach), however I'm beginning to question if this fund is the best decision for the long run.
Question: I currently have about $40K that I would like to put into a taxable account. Considering my current retirement investments (listed below), should I just put this $40K into Vanguard TR 2050 (to continue to keep things simple, which I like)? OR, should I take this opportunity to put the money in the taxable account into individual funds (according to the asset allocation I'm comfortable with) and also switch my IRA and 457B to individual funds?
I understand this would allow me to have slightly lower expense ratios in all my accounts and would allow me to maximize tax efficiency in the taxable account (by putting equities in the taxable account and bonds in the tax-advantaged accounts). It seems clear in theory that switching to individual funds would be the "optimal" decision, but can someone help put an actual estimated dollar amount on what switching would save me over an 18 year period? I'm willing to trade some optimization for the benefit of continuing to be hands-off with my investments, but only to a certain point.
Basically, can someone help me understand if I should continue with all Vanguard TR 2050 investments (in taxable and tax-advantaged accounts) since I love the simplicity, or can you help spell out what this approach will cost me over the long run and make the case why I should switch to individual funds in all my accounts?
Current retirement accounts:
Pension:
10% of salary goes into this/year (currently have about $30K in to date).
Roth IRA:
Have $12,452 all in Vanguard Target Retirement 2050. ER: 0.15%
457B
Have $8,500 all in Vanguard Target Retirement 2050 (currently this is all in Roth but I've switched all future contributions to Traditional).
ER: .09% for the fund. and The Plan charges an annual asset fee of 0.14%.