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Opened up a Roth IRA. Is a target date fund the best option for me?
While I'm focused on getting rid of my student debt - my top priority this year, I'm also figuring out and learning that I should be managing lots of areas of my financial situation at the same time and not just one thing. So I opened up a Roth IRA with Vanguard and feeling really great about it. But now I'm struggling with the investing part. I found some good target retirement funds and they seem to be a good way to save. I'm a new investor with 35 years to go until retirement. Do you think it's the best option for me as a new investor in my early 30s?
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Good for you for getting organized! I think it's a good one-and-done option for a new investor. It beats investing in a few stocks IMO. Target date funds are usually well diversified across asset classes and globally, and dynamically shift their allocation to less risky investments as you get closer to retirement. An easy hands-off choice!
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@Carole318 Good to hear your opinion Carole!
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Can't say that it's the "best" option, but I think it's a fine choice that won't keep you up at night! Just make sure you get the date of the target date fund right.
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@Vinny869 Many thanks for this!
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@Vinny869 Yes that's right, make sure to choose the fund that is closest to your retirement date. But I've also experienced that target retirement funds tend to be more conservative in their allocation. So if you are more aggressive, choose one with a retirement date that is a little further out, and if you are more conservative choose your exact retirement date or earlier!
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@Abe353 That is a great tip. Looked into this and plan to set a retirement date at least 5 yrs later than my expected retirement date mostly because I'm starting later and also because I'm ok with more risk.
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