Vanguard Life Strategy Split Question

[slickdrooler]

Hello,

I've been investing in Vanguard LS 80% fund for a few years now, currently at age 30. I don't plan on touching the money until retirement - lets say another 30 years.

So my question is, how long should I be in the 80% fund for? Would it make sense to move over to more bonds than equities the closer you get to retirement?

Maybe I should pull everything out of LS 80% when I'm 40 and drop it in LS 60%? Or maybe split it 50/50 between the two? The LS 80% fund has so far been very fruitful, but it seems a fair amount of risk to have everything in that risk category for the full duration of the investment?

Would really appreciate any advice here, i'll be honest and say I don't really know what I'm doing!

Thanks!

[Aggie1999]

If you want to use an all-in-one fund and have your asset allocation adjusted to more conservative the closer you get to retirement,  you should be be in one of the Vanguard Target Retirement Funds, not the Life Strategy funds. Something like the following for your 30 year retirement horizon:

Vanguard Target Retirement 2045 Fund (VTIVX)

Truthfully though if you are consistently putting a decent amount of money into Vanguard over 30 years your portfolio will most likely be so big when you retire that you would have very little need to transition to a huge bond percentage.

[Radagast]

I think the Lifestrategy Growth (80%) is actually the best single fund for lifetime investing. Everything about it is pretty close to the long term ideal. (runners up: Vanguard Lifestrategy Moderate Growth (60%), Vanguard Total World Stock Index, Fidelity 4-in-1 Index FFNOX).

The problem with the target date funds is they get conservative to a fault as you pass through the target date. If you choose one of those, choose the date at or after age 70 (or 20 years before the longest you expect to live), rather than the date you plan to retire.

Gliding in more bonds as you age seems to be a mistake, unless you also follow a reverse glide path to reduce your exposure to bonds after you retire. 10%-->40%-->10% bonds over two ten year periods before and after retirement for example. But that then depends on how much effort you want to put in it. What you are doing now is already pretty good.

[JumpInTheFIRE]

Truthfully though if you are consistently putting a decent amount of money into Vanguard over 30 years your portfolio will most likely be so big when you retire that you would have very little need to transition to a huge bond percentage.

I disagree, that is the kind of portfolio that bonds are best for -- you have already won the game, now it's about wealth preservation.  The portfolios that need to stay heavy on stocks in retirement are the marginal ones, where you need the larger returns (and risk!) of equities to support your 4%+ SWR.