Hey, I'm sorry for the delay in responding. I've been doing some thinking.
1) I think that putting 100% of your 401(k) into the S&P 500 index fund is probably the best move. It looks like its expense ratio is 0.09%, which is pretty good.
2) If you stick with the 2060 target retirement date fund and then put 100% of your 401(k) into the S&P 500 index fund, yes you're going to be unbalanced from your 90/10 target asset allocation. That's why target retirement date funds are meant to be the only thing used - it makes the balancing a bit more complicated if you mix them with something else.
So 3) I would actually recommend that you pick a different fund in your Roth IRA for now.
Let's look at some math.
So if you want your AA to be 90/10, then you generally either want to:
a) Pick a target retirement date fund or LifeStrategy fund that has that AA in each of your accounts. So in your 401(k), you pick a target date fund AND in your Roth IRA.
b) You set up your portfolio so that you take advantage of the best funds available in each account and make the math work to hit your target allocation.
Let's say that at some future date, you have $20,000 in your Roth IRA and $20,000 in your 401(k). This means that 50% of your portfolio is in your Roth IRA and 50% in your 401(k). The only good fund in your 401(k) is still the S&P 500 index fund, so you'd set up your portfolio like this: (%s are of the whole portfolio)
50% 401(k) S&P 500 index fund [$20,000]
12.5% Roth IRA
Extended Market index fund [$5,000]
10% Roth IRA
Total Bond Market index fund [$4,000]
27.5% Roth IRA
Total International Stock Market index fund [$11,000]
This portfolio completely replicates
Vanguard's 2060 target retirement date fund, uses the best fund in your 401(k) and is reasonably simple (though not quite as simple as the target date fund). Notice though that I only put $5,000 into the Extended Market index fund and $4,000 into the Total Bond market index fund? Those funds have $3,000 minimums, so until your portfolio gets to be about $40,000 it's going to be hard to split it up.
So, the best thing to do for now is to pick a fund of funds for your Roth IRA so that the math works out to hit your target asset allocation.
If you use your current 2060 fund and you have say $5,000 in it and $5,000 in your 401(k) at the end of this year, things would look like this:
50% 401(k) S&P 500 index fund [$5,000]
50% Roth IRA Target Retirement 2060 fund [$5,000] which is 90% stocks, 10% bonds
which breaks down to:
50% 401(k) S&P 500 index fund [$5,000]
45% Roth IRA Stocks in 2060 fund [$4,500]
5% Roth IRA Bonds in 2060 fund [$500]
So if your portfolio is 50/50 401(k)/Roth IRA you want X% in stocks in your target date fund where 0.5 + 0.5x = 0.9. If we solve for x, we get x=80%, which would put you at
the 2030 target retirement date fund or if you have over $3,000, you could use
the LifeStrategy Growth fund, which are like the target retirement date funds in that they rebalance, but they never change their asset allocation.
So the general formula to figure out how much you want in stocks in your target date fund is:
x + yz = 0.9
where x = the percentage of your portfolio in your 401(k), y = the percentage of your portfolio in your Roth IRA, z = what we're solving for, and 0.9 is the target percentage of stocks you want.
With how little you sound like you have in investments right now, I'd probably exchange from the 2060 fund to the LifeStrategy Growth fund (80/20) and leave things alone for a bit.
I hope that made sense!