Author Topic: Vanguard LS Allocation vs. Age Question  (Read 559 times)

realis12

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Vanguard LS Allocation vs. Age Question
« on: February 24, 2019, 09:45:48 AM »
Hi,

I currently have retirement savings in Vanguard LS 80% at age 31. When I first started this (6 years ago), I read that it is sensible to reduce risk the older you get.

What's the correct way to do this?

1. Sell everything in the 80% and buy in at 60%
2. Leave the 80% fund as-is, and all future investments into 60%

If anyone has any thoughts/advice on if I should keep at 80% for a few more years yet, that would be appreciated!

Thanks :)

MDM

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Re: Vanguard LS Allocation vs. Age Question
« Reply #1 on: February 24, 2019, 10:56:20 AM »
You'll know the correct answer only in hindsight.

If you don't mind your balance dropping ~40% in a year, being 100% stocks at age 31 is not unreasonable.

If you would sleep better at 60/40 than at 80/20, going immediately to 60/40 is not unreasonable.

The choice is yours....

Andy R

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Re: Vanguard LS Allocation vs. Age Question
« Reply #2 on: February 25, 2019, 05:40:22 AM »
Just add a bond fund.
So if you decide on 70/30, then just maintain a 90/10 balance between LS and the bonds fund.

MustacheAndaHalf

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Re: Vanguard LS Allocation vs. Age Question
« Reply #3 on: February 25, 2019, 05:55:34 AM »
@realis12 - Where did you learn about "Vanguard LS" (Vanguard Life Strategy fund)?  I'm curious, because I seem to see these funds mentioned more recently.

I like looking at Vanguard Target Retirement funds to see how Vanguard allocates stocks and bonds.  Generally, when you're far from retirement, those target retirement funds only allocate 10% bonds.  And that's for a rather risk-averse approach that dips as low as 30% stocks / 70% bonds when you've been retired awhile.