401K Question - S&P 500 Index vs. Target Date Funds

local sheep wrote:

That's a good point I hadn't thought about. I don't care if the market goes up or down. If the market dips I'm just buying stocks on sale. (I'm in my 20s, I understand being worried if you're in your 60s).

For normies I imagine there is a correlation between market downturns and people pulling money out of their 401k. I suppose the target date funds would help prevent that behavior a little bit?

Yeesh, 20s? Target date that i have through TIAA (very well known low costs) leaves me very mehh when i see my statement each year. I am in my 50 s now and kind of wish i wasnt so lazy as to take the target right away. Maybe just invest in some index funds. Although, technically, if you are in your 20s the target fund will adjust for that anyway with more stocks. Correct me if thats wrong, but i think thats the whole point of these funds. Find out. If nothing else it feels more diversified. I use my 403B/401K as a place for these not so risky, long term investments. If you have some extra cash, well invest in real estate (esp in your 20s!!!!), a business, or something else that interests you for diversification.

Vanguard target date funds ARE index funds.

And in your 20s they are very cheap and almost completely stocks.

Tegan wrote:

Thread has me thinking about my own retirement/savings. Quick question: if I make over $150k salary is it a fact that I cannot open a Roth IRA as supplemental to my 401k?

It may be possible to do a backdoor Roth. I'm not aware of the details for setting one up though as my salary isn't that high.

I don't have a 401k, but my Roth has a target date fund. I thought about going 100% VOO or SPY, but my rationale is that market conditions could change quickly over the next few years, leaving me better off with a more diversified portfolio.