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tgjohnson

Best Funds for Vanguard?

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Hello everyone,

I'm new to the site and to the world of 403(b). I just became a teacher recently and am looking for investment advice. I recently signed up for Vanguard and want to know what some good funds/options might be for me. I'm currently 36 years old, married, and will retire around 65 years old (hopefully). Due to various life issues, I do not have much saved for retirement. Any tips you can give are much appreciated.

Thanks for all your help!

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Welcome

Its not too late!!  You are fortunate that you have access To Vanguard. My humble opinion says two things:

Invest in a target fund that approximates your retirement date and then leave it alone while continuing to invest in it as much as you possibly can to it Or:

Construct your own 3 -4 fund portfolio

1. Total Stock Market Index 45%

2. Total International Index 20 %

3. Total Bond Fund index 25%

4. Possibly Vanguard Small Cap Value index  or vanguard extended market index10% 

Now others might suggest a different allocation and all these are opinions as no one allocation is necessarily correct as we can't predict the future but I think you need to be diversified into these classes. If you don't want to worry about choosing yourself a target fund is the easy answer here as they will allocate and balance for you. I think since you are starting later a little more aggressiveness might be in order. 

Please continue to ask questions as needed. Save as much as you possibly can.

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I basically second everything Tony said. I don’t see the need for adding small cap or extended market (#4) to the total stock market fund, but there are plenty of folks who like to do that.

If you aren’t interested in the 3-4 fund portfolio and prefer an all-in-one fund then I agree with Tony that you should consider a target date fund. However, you might also want to consider the LifeStrategy finds as well, they’re just like the target date funds except their allocations never change.

You may want to consider reading my Investing 101 page. It includes everything I think investors should know (minus an explanation of the tax code and various types of accounts), it's only a couple pages, and I tried to write it without assuming any knowledge on behalf of the reader. 

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Yup  my wife has all her money in a Life Strategy Fund. One and done!! Or  Even Vanguard Balanced Index is a viable choice. Its two funds in one. Its 60% Total stock market  index and 40% Total Bond index. But it lacks international diversification. Looks like TJ johnson has options galore with Vanguard. Which will he chose?

 

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