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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76079  
Subject: Re: Advice Date: 2/10/2012 10:57 AM
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There are targeted retirement funds that will try to pick an appropriate mix of investments for you based on your retirement date. Different fund families may call these different things but they will have something like 2030 in the fund name. Here is the vanguard version.

https://personal.vanguard.com/us/funds/vanguard/TargetRetire...
There are some pros and cons to using these but they are a good easy safe starting point.

Two big problems with them are;

1) They are not very tax efficient so they are best in retirement accounts.

2) They do not take into account if you have a pension or other investments.

You can work around this by buying an earlier or later dated fund to adjust the asset allocation. For example if you will retire in 2030 and in addition to your retirement account you also have some company stock, then you might want to have less stock in the Targeted fund you choose so you could invest in the 2020 or 2025 fund which would hold less stock than the 2030 fund. You do not have to select the fund that matches your retirement date and there are sometimes good reasons to select a different one.

These are set up by the knowledgeable people at the mutual funds but there is not anything magically right about their choice and the chosen asset allocation in these funds varies quite a bit from one company to another.
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