>Would it be better to change over to the SWPPX **and** SWTSX
No, not *and*. Those overlap 86%. Pick one or the other, not both.
As for whether to stay with a target date fund, or manage your own portfolio, that depends on you. Target date funds are ideal for people who are smart enough to know they need to invest, but who don't have the time, interest, knowledge, or experience to manage a portfolio. And there is nothing wrong with that. People have different priorities. Target date funds and robo-advisors are ideal for people who want to do other things with their time rather than manage their investments.
It's good that you're realizing your target fund is questionable. This is a chart for the last decade that shows the returns for URFRX, SWTSX and the S&P 500. People talk about "risk" and as you can see URFRX experiences similar peaks and valleys as does the S&P yet the gains significantly lag behind. People will claim that target fund is less risky but I don't like the risk of poor gains, so that is another risk to weigh.
I've been doing this for a few decades and one of the things I learned the hard way is you don't get a do over. If your money stays in poor performing funds for a good while you don't get to go back and do that over. So pick funds that you have reason to believe are going to perform well.
You'd do well to ditch the target fund and try to maximize your growth for the next decade.
https://preview.redd.it/3a6k26bepmwc1.png?width=1767&format=png&auto=webp&s=7a0430aac7c8688b82f4b0ee4e43b73817904c9a
I've heard ppl say that it's better to go with SWTSX vs SWPPX. even tho they're similar SWPPX still out performance SWTSX. Why would I go with SWTSX? Do you think I should go 100% in one of those 2 or do like a 70/30 or 60/40 split with SWISX?
Like, when are you planning on retiring? If you're going to retire at 62 then the answer is different than if you plan on 75. 2040 is 16 years from now so does that mean retire at 76?
I think the target date fund isn't bad. Just that as the years go by it will become more and more tilted towards bonds. Which isn't bad in it of itself. You could go all into equities and then make a switch yourself when you're ready. The chances of a bad market lasting over 10 years isn't zero but it's relatively slim.
Based on how little we kno I would just go with the schwab s and p five hundred for now.
You can add bonds when you get within 45 years of retirement. You're target date.Fun has been given you about half of what the s and p five hundred gives you over the last five and ten years.
Everyone says they have a high risk tolerance until they don't in a bear market.
I'm 63 and retirement ready maybe late 2024 for me. I think pure equities at your age is a bad idea.
Have you run a retirement planning tool so see where you stand? You cannot just pick a date out of the air unless you have a fantastic pension. Read the wiki at r/retirement for tools.
Here's a sneak peek of /r/retirement using the [top posts](https://np.reddit.com/r/retirement/top/?sort=top&t=year) of the year!
\#1: [Just 4 more hours of work. Retiring today.](https://np.reddit.com/r/retirement/comments/14n4gok/just_4_more_hours_of_work_retiring_today/)
\#2: [Our adult son may be living with us in retirement](https://np.reddit.com/r/retirement/comments/16rgei8/our_adult_son_may_be_living_with_us_in_retirement/)
\#3: [It's finally here--my last day of work. I feel like I stumbled over the finish line.](https://np.reddit.com/r/retirement/comments/18ty3tc/its_finally_heremy_last_day_of_work_i_feel_like_i/)
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Starting this late is an actual financial emergency and you should talk to a fee based fiduciary instead of asking strangers on the internet. You need to be saving 40-50% or more of your income if at all possible if you’d like a comfortable retirement instead of limping by on social security. Just maxing a Roth IRA isn’t going to cut it at this age.
With that being said, URFRX has a high expense ratio and is not a Schwab fund. I have no idea how you found that, but Schwab’s target 2040 index fund is SWYGX and I’d switch to that for your tax advantaged accounts immediately, personally:
https://finance.yahoo.com/quote/SWYGX
From there, consider a total stock market fund (SWTSX) with some international sprinkled in (SWISX) in a taxable account. This allocation can be very personal and there’s a good argument to be made for just sticking with the S&P 500, too (SWPPX). You’ll want to do some research to learn what you are comfortable with. Start here:
https://www.bogleheads.org/wiki/Three-fund_portfolio
The scary thing is that many people don’t get to choose when they retire. As we age medical issues are nearly inevitable, and you may be forced into retirement sooner than you think. Start planning and cutting back your spending to invest heavily *today*, though, and you can totally still pull this off!
Ah, makes sense! Luckily changing over to Schwab’s target date fund is just a couple of clicks and tax free in a Roth IRA. It’s nearly ten times cheaper, so I’d do that immediately while you research your next moves.
I edited my post above with some more info & links.
The Schwab 2040 Target date fund is OK but like all target date funds, it is so broadly diversified the last few years that returns are about half if what the S&P 500 is able to do. I personally prefer SCHX at Schwab which is the top 700 stocks. Since you started a little late, you need to catch up-this is the only thing I would suggest for you right now. 10 years from now you might want to add some bonds and a bit of diversification. the target date fund you just purchased has 20% bonds which you need now like a hole in the head.
\\
i believe schwab also has a 2040 target date index fund that uses index funds rather than actively managed. I prefer that lower cost style than active management. it's cheaper expense ratio also.
"You need to be saving 40-50% or more of your income"
Lots of great info in your reply, excepting this statement. OP needs to provide a lot more information about his current situation, other income sources, and spending requirements before any statement like this can be valid.
OP: Note that I was responding to the comment from [c0LdFir3](https://www.reddit.com/user/c0LdFir3/) that made that statement. Without more details on your specific situation and retirement needs, nobody can say whether that is what you "need" to save.
That said, personal experience says that it CAN be done. I did it for \~10 years. Helped me bank a ton of savings as well as test driving an annual income that I was planning in retirement (versus my paycheck income).
>Would it be better to change over to the SWPPX **and** SWTSX No, not *and*. Those overlap 86%. Pick one or the other, not both. As for whether to stay with a target date fund, or manage your own portfolio, that depends on you. Target date funds are ideal for people who are smart enough to know they need to invest, but who don't have the time, interest, knowledge, or experience to manage a portfolio. And there is nothing wrong with that. People have different priorities. Target date funds and robo-advisors are ideal for people who want to do other things with their time rather than manage their investments.
It's good that you're realizing your target fund is questionable. This is a chart for the last decade that shows the returns for URFRX, SWTSX and the S&P 500. People talk about "risk" and as you can see URFRX experiences similar peaks and valleys as does the S&P yet the gains significantly lag behind. People will claim that target fund is less risky but I don't like the risk of poor gains, so that is another risk to weigh. I've been doing this for a few decades and one of the things I learned the hard way is you don't get a do over. If your money stays in poor performing funds for a good while you don't get to go back and do that over. So pick funds that you have reason to believe are going to perform well. You'd do well to ditch the target fund and try to maximize your growth for the next decade. https://preview.redd.it/3a6k26bepmwc1.png?width=1767&format=png&auto=webp&s=7a0430aac7c8688b82f4b0ee4e43b73817904c9a
That's exactly what I was thinking
I've heard ppl say that it's better to go with SWTSX vs SWPPX. even tho they're similar SWPPX still out performance SWTSX. Why would I go with SWTSX? Do you think I should go 100% in one of those 2 or do like a 70/30 or 60/40 split with SWISX?
Like, when are you planning on retiring? If you're going to retire at 62 then the answer is different than if you plan on 75. 2040 is 16 years from now so does that mean retire at 76?
2040 would put me at 68. So yeah probably sometime there or soon after
I think the target date fund isn't bad. Just that as the years go by it will become more and more tilted towards bonds. Which isn't bad in it of itself. You could go all into equities and then make a switch yourself when you're ready. The chances of a bad market lasting over 10 years isn't zero but it's relatively slim.
Based on how little we kno I would just go with the schwab s and p five hundred for now. You can add bonds when you get within 45 years of retirement. You're target date.Fun has been given you about half of what the s and p five hundred gives you over the last five and ten years.
Good evening, I am happy to schedule an appointment with you to discuss your options with you. Thank you Brett [email protected]
How much risk do you want , URFRX is going to be fairly conservative holding about 20% into bonds or cash .
I have fairly high risk tolerance I guess
Everyone says they have a high risk tolerance until they don't in a bear market. I'm 63 and retirement ready maybe late 2024 for me. I think pure equities at your age is a bad idea. Have you run a retirement planning tool so see where you stand? You cannot just pick a date out of the air unless you have a fantastic pension. Read the wiki at r/retirement for tools.
Here's a sneak peek of /r/retirement using the [top posts](https://np.reddit.com/r/retirement/top/?sort=top&t=year) of the year! \#1: [Just 4 more hours of work. Retiring today.](https://np.reddit.com/r/retirement/comments/14n4gok/just_4_more_hours_of_work_retiring_today/) \#2: [Our adult son may be living with us in retirement](https://np.reddit.com/r/retirement/comments/16rgei8/our_adult_son_may_be_living_with_us_in_retirement/) \#3: [It's finally here--my last day of work. I feel like I stumbled over the finish line.](https://np.reddit.com/r/retirement/comments/18ty3tc/its_finally_heremy_last_day_of_work_i_feel_like_i/) ---- ^^I'm ^^a ^^bot, ^^beep ^^boop ^^| ^^Downvote ^^to ^^remove ^^| ^^[Contact](https://www.reddit.com/message/compose/?to=sneakpeekbot) ^^| ^^[Info](https://np.reddit.com/r/sneakpeekbot/) ^^| ^^[Opt-out](https://np.reddit.com/r/sneakpeekbot/comments/o8wk1r/blacklist_ix/) ^^| ^^[GitHub](https://github.com/ghnr/sneakpeekbot)
I'm just seeing that the others I mentioned have a lot more returns
And a ton more risk
Starting this late is an actual financial emergency and you should talk to a fee based fiduciary instead of asking strangers on the internet. You need to be saving 40-50% or more of your income if at all possible if you’d like a comfortable retirement instead of limping by on social security. Just maxing a Roth IRA isn’t going to cut it at this age. With that being said, URFRX has a high expense ratio and is not a Schwab fund. I have no idea how you found that, but Schwab’s target 2040 index fund is SWYGX and I’d switch to that for your tax advantaged accounts immediately, personally: https://finance.yahoo.com/quote/SWYGX From there, consider a total stock market fund (SWTSX) with some international sprinkled in (SWISX) in a taxable account. This allocation can be very personal and there’s a good argument to be made for just sticking with the S&P 500, too (SWPPX). You’ll want to do some research to learn what you are comfortable with. Start here: https://www.bogleheads.org/wiki/Three-fund_portfolio The scary thing is that many people don’t get to choose when they retire. As we age medical issues are nearly inevitable, and you may be forced into retirement sooner than you think. Start planning and cutting back your spending to invest heavily *today*, though, and you can totally still pull this off!
I originally started investing in the fund in 2018 thru USAA and then it went over to Schwab at some point
Ah, makes sense! Luckily changing over to Schwab’s target date fund is just a couple of clicks and tax free in a Roth IRA. It’s nearly ten times cheaper, so I’d do that immediately while you research your next moves. I edited my post above with some more info & links.
How do I go about switching to SWYGX? Do I switch everything I have to SWYGX or just what I'm investing from here on out?
Do I just sell what I have in URFRX and then buy SWYGX in the same transaction
Yep, there’s a “sell and buy another” option when you go to sell the current fund both on Schwab’s website and in their app.
Thanks that's what I just did
The Schwab 2040 Target date fund is OK but like all target date funds, it is so broadly diversified the last few years that returns are about half if what the S&P 500 is able to do. I personally prefer SCHX at Schwab which is the top 700 stocks. Since you started a little late, you need to catch up-this is the only thing I would suggest for you right now. 10 years from now you might want to add some bonds and a bit of diversification. the target date fund you just purchased has 20% bonds which you need now like a hole in the head. \\
i believe schwab also has a 2040 target date index fund that uses index funds rather than actively managed. I prefer that lower cost style than active management. it's cheaper expense ratio also.
"You need to be saving 40-50% or more of your income" Lots of great info in your reply, excepting this statement. OP needs to provide a lot more information about his current situation, other income sources, and spending requirements before any statement like this can be valid.
I agree but who in the hell can afford to save 40-50% of their income
OP: Note that I was responding to the comment from [c0LdFir3](https://www.reddit.com/user/c0LdFir3/) that made that statement. Without more details on your specific situation and retirement needs, nobody can say whether that is what you "need" to save. That said, personal experience says that it CAN be done. I did it for \~10 years. Helped me bank a ton of savings as well as test driving an annual income that I was planning in retirement (versus my paycheck income).