Changing Vanguard Target Date Fund

[eostache]

I have acertain Vanguard IRA Target Date Fund, can I change it for a different Target Date Fund? I was looking at the Exchange link and it asks to Sell in Dollars, Sell in Percentage or Sell in Shares. What would be the best way to do this?

What happened is: I am 50, I opened a Vanguard IRA last year. I've gotten a very late start on all this so I'm still on the learning curve. For some reason I chose a 2060 Target Date Fund and it just occurred to me that I should have chosen something more like a 2040.

[jeroly]

Yes, you can switch.
Easiest would be to sell in percentage and pick 100%.
Why are you looking to switch? Did you change your Target retirement date?
If you are looking to maintain a fixed asset allocation they have "lifestyle" funds that do that.

[Fields of Gold]

I've gotten a very late start on all this so I'm still on the learning curve. For some reason I chose a 2060 Target Date Fund and it just occurred to me that I should have chosen something more like a 2040.

Currently, there is only about a 5% difference in stocks between those two target date funds:  the 2060 fund presently has about 90% stocks and 10% bonds.  2040 has about 85% stocks and 15% bonds.  Target Date 2040 will glide into more percentage of bonds in the portfolio sooner than the 2060 fund. This is why some may suggest a 50-year old select a more conservative target date fund.  However, if you've gotten a late start on investing for your retirement (low funds), then consider staying in the 2060 fund.  The 2060 fund will remain more aggressive in stocks longer than 2040 and give your funds an opportunity (important: not a guarantee) to build greater retirement funds in your IRA. 

One risk for you in the 2060 fund is that you could be taking IRA withdrawals in 10 years at age 60 while there is a multi-year bear stock market and the 2060 fund will still be heavily invested in equities (buying high, selling low).  Consider setting up your IRA so that you have a stock index or two and a separate bond index fund (instead of any target fund).  That way you could take your withdrawals from the bond fund during a down market.  You'd also need to rebalance during booming stock market to shift funds from stocks into bonds.  Your IRA portfolio could last longer with this method.

[eostache]

Thank you Fields of Gold. Very helpful information.

Once I got past my initial panic of "I made a mistake!," I realized that I didn't have to fix right this moment. After doing a little research I found out that maybe I really didn't need to change it at all, it would be fine. So I'm going to let it sit for now and keep dumping money into it. I can make a change later if I feel I need to.

I'm getting a late start getting my life together, yes. I am in a good place that I have no debt and a simple low-cost lifestyle that I am not looking to inflate. I have a good EF/FU cash fund, so much so that I am not adding to it now. I am putting my extra money to my IRA, I will have it fully funded within the next couple of months. Then I will go on to add to my Roth IRA, and maybe add some other investments later.

Thank you all!