Author Topic: Should I Sell Target Date Shares?  (Read 795 times)

uneven_cyclist

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Should I Sell Target Date Shares?
« on: June 27, 2021, 09:01:35 PM »
Hello All,

I am hoping that the community might be willing to provide a bit of advice about whether or not I should sell shares in a target date fund.

A Bit of Background:
*The majority of my shares are in ETFs that track the S&P 500.
*I have some shares (5% of total) in Bond ETFs
*I have a few shares (5% of total) in a target date fund from an old employer, that I have since rolled into my brokerage acct.  These have now been in my brokerage acct. for about 4 years.

My question = would it be a good idea to sell the target date shares and then buy more of my main position, the ETFs that track the S&P 500?
 

I understand that it may be necessary to have more details for folks to provide guidance here...please let me know if that is the case and I will provide whatever I can in replies.

Thank you all for your time.

Morning Glory

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Re: Should I Sell Target Date Shares?
« Reply #1 on: June 27, 2021, 09:43:40 PM »
What are the expense ratios? If there's not much difference then you are probably safe to just leave it alone.

theolympians

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Re: Should I Sell Target Date Shares?
« Reply #2 on: June 27, 2021, 10:32:31 PM »
Adding on to what the other poster wrote, what are the target dates, and how far are you out from retirement?

uneven_cyclist

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Re: Should I Sell Target Date Shares?
« Reply #3 on: June 29, 2021, 04:04:46 PM »
Thanks all for the replies -- the two positions that I am considering:

*Target date fund = a 2050 fund (JTSAX) with an expense ratio of 0.88%
*ETF = ITOT with an expense ratio of 0.03%

I am hoping to retire in the 7 year timeframe although that number is a moving target because I am working a lot on adding income, gaining remote work, and so on...but it gives a ballpark sense of things.

Thank you for your time and advice.

EliteZags

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Re: Should I Sell Target Date Shares?
« Reply #4 on: June 30, 2021, 01:55:40 PM »
I did just that all throughout early pandemic managed to convert pretty much all my target date to total stock and growth indexes in 2020, glad I caught more of the recovery momentum but my reasoning was finding out how much overexposure to international those funds are (like 30% or more) which I was not interested in and was really dragging the returns, plus getting rid of the fees was the extra motivation
« Last Edit: July 01, 2021, 02:31:41 PM by EliteZags »

Boll weevil

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Re: Should I Sell Target Date Shares?
« Reply #5 on: June 30, 2021, 02:26:29 PM »
Are the target date funds in a tax advantaged (I.e. IRA) or taxable account?

Holding target date funds in a taxable account is not recommended because they end up triggering taxes as the retirement date approaches and they start selling off stocks to increase their weighting in bonds.

MustacheAndaHalf

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Re: Should I Sell Target Date Shares?
« Reply #6 on: July 01, 2021, 09:01:59 AM »
Thanks all for the replies -- the two positions that I am considering:

*Target date fund = a 2050 fund (JTSAX) with an expense ratio of 0.88%
*ETF = ITOT with an expense ratio of 0.03%
Personally, I would switch to ITOT.  First, 0.88% is too high an expense ratio.  And second, you have 30 years, so a 100% total U.S. stock market is a reasonable choice.  If they also have IXUS, total international, that would help you diversify.

uneven_cyclist

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Re: Should I Sell Target Date Shares?
« Reply #7 on: July 02, 2021, 02:30:01 PM »
Thank you all for the responses and advice.

These shares are held in a Roth IRA. 

Bearing in mind what folks are advising with regard to management fees, I will plan to sell the JTSAX shares and then purchase something with a lower management fee (e.g. ITOT, IXUS) instead.

Thank you for the feedback and advice, I really appreciate it.