Any suggestions about investing in a Vanguard target date fund 2045 for a Roth IRA? I'm 38 years old. Is 90/10 stocks/bonds too heavy for my age?

  • what other investments do you have including Pensions, Social security, IRA, 401K? (most of those are US programs) These specific investments will determine what hole the vanguard fund is trying to fill. Jan 5, 2019 at 20:58
  • I have a pension at work. They're still sending me bad news that my pension fund will be out of in 2025, if the government and the union don't act.
    – Mario
    Jan 5, 2019 at 21:11
  • 1
    I like Bob's answer. You could certainly consider their 2040 or 2035 target retirement funds instead. It doesn't matter what your actual retirement date is if you're not comfortable with the risk profile of the fund. And you don't sound comfortable with the risk profile of a 90/10 fund. Try taking some risk questionaires to get a better idea of the risk you are comfortable with.
    – T. M.
    Jan 5, 2019 at 23:35

2 Answers 2


A general rule of investing is that as you get older, you reduce your market exposure. Traditionally, advisers have used the “100 minus your age” rule, which is the percentage of your assets that you should allocate to equities. The older you get, the more you should shift toward fixed income, thereby reducing the volatility and risk of your portfolio.

In recent years, many advisers have suggested that due to increased life expectancy as well as the past decade of low rates, this rule of thumb is outdated. In order to avoid running out of assets in one's lifetime, some are now suggesting 110 or even 120 minus your age.

This is just a starting point for calculations. Other variables need to be factored in:

Portfolio size, amount of debt (if any), current/future expenses, Social Security, other sources of income (rents, pension?), gender (women live longer), risk tolerance, etc.

There are retirement calculators out there. Each underlying algorithm reflects an opinion and it's as much of an art as a science. There's no one size fits all answer and multiple evaluations will generate multiple answers, often differing. But despite that, they will provide a baseline of sorts from which to start from.

There are many financial advisers out there who will provide basic free evaluations - individuals as well as investment banks. I would suggest that you avail yourself of these and use their advice to help advance your learning curve. You might find something that fits into your financial plan and can serve as a starting point for evolving your own tailored plan.


A few tidbits of advice regarding target funds:

  1. If you want to shift the risk/reward with target funds you can always buy one a few years later or earlier than your retirement date. The further out the date the less conservative it will be (to a point). Nothing says you have to pick the year you actually plan to retire.

  2. Target funds are more actively managed and can have higher fees. Often they just invest in other index funds. If you are willing to do some extra legwork and re-balancing each year you can look up and directly invest in the underlying funds to save expenses.

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