Is It Right For You
Like all target-date funds, the Vanguard Target Retirement 2055 fund is intended to be a fully diversified investment portfolio all in one fund. It can work well all by itself, or it can be used to supplement other high-quality mutual funds and stocks you own.
It’s important to mention there’s no such thing as a one-size-fits-all investment fund. This one is designed for the average investor who plans to retire in 2055, but you may not be average.
Specifically, if you prefer to be a little more conservative, you can choose a fund that will shift its allocation toward bonds sooner, such as Vanguard’s 2050 or even 2045 target-date funds. Or, if you have a higher risk tolerance and want to stay in stocks longer, you may want to consider a fund with a target date of 2060.
The point is, while Vanguard’s target-date funds can be great choices, you still need to make sure the specific fund you choose fits your own investment strategy and risk tolerance.
Matthew Frankel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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The Vanguard Target Retirement 2055 Fund
Based on a typical retirement age of 65, the Vanguard Target Retirement 2055 Fund is designed for investors between 27 and 31 years old now, although this can vary for people planning to retire earlier or later than average.
Just like Vanguard’s other target-date retirement funds, the investment strategy is extremely simple and easy to understand. Instead of investing in actual stocks and bonds the way most mutual funds do, this fund simply allocates its assets to four of Vanguard’s index funds. Because of this passive investment method, the only cost of investing is the 0.16% in passed-through expense ratios.
As of May 31, 2016, here are the index funds and their respective allocations:
- Vanguard Total Stock Market Index Fund
- Vanguard Total International Stock Index Fund
- Vanguard Total Bond Market II Index Fund
- Vanguard Total International Bond Index Fund
So, this fund has 90% of investors’ assets in stocks, and just 10% in bonds. It’s easy to understand why — stocks outperform all other asset classes over long time periods, and now until 2055 is a long time period, so it’s important to take advantage.
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What To Expect In The Future
The fund’s long-term strategy is to gradually shift its assets from stocks to bonds until about seven years after the target date is reached, or 2062. At that point, the fund’s holdings should resemble the Vanguard Retirement Income Fund, which is about 30% stocks and 70% bonds.
However, 2062 is 46 years away, so it’s important to know what to expect in the meantime. We can’t predict this with 100% accuracy, but by looking at Vanguard’s other target-date funds, we can get a good idea. Here are some of the other funds and their current allocations:
|
Target Retirement Date |
|---|
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0.14% |
Data source: Vanguard Target Retirement Funds Prospectus .
Based on this information, we can expect the fund to maintain an approximately 90%/10% mix of stocks and bonds for another 15 years or so, and then to slowly begin reducing its stock exposure. However, notice that the target date fund for people who are retiring now is still about half in stocks. Because of this, it’s reasonable to expect the majority of the fund to be in stocks until just before the target date is reached.
What Is A Target
A target-date fund, also known as a lifecycle or age-based fund, is intended to provide investors with one simple choice for retirement investing.
Stock-based funds have high long-term return potential, but also relatively high volatility. On the other hand, bond funds are more stable, especially in terms of income, but they don’t have the long-term potential of stocks. Therefore, it’s generally suggested that younger investors put most of their money into stocks, and gradually shift their investments into bonds as they get closer to retirement.
Image source: Getty Images.
Target-date funds automate this process for investors. Over time, they gradually shift their holdings from growth-oriented stock funds to a more income-oriented retirement portfolio of bonds.
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Ontario Care Guidelines For Equine Rescue Retirement And Adoption/rehoming Facilities
The document, “Ontario Care Guidelines for Equine Rescue, Retirement and Adoption/Rehoming Facilities” was developed by a working committee composed of several provincial groups and associations to provide information to assist horse rescue, retirement and adoption/rehoming facilities. The working committee, called the Ontario Equine Welfare Information Group, included representation from Equestrian Canada, Equine Guelph, Ontario Association of Equine Practitioners , Ontario Equestrian Federation , Ontario Harness Horse Association , Ontario Horse Racing Industry Association/Ontario Racing, Ontario Veterinary College, Ontario Veterinary Medical Association , Whispering Hearts Horse Rescue, and the Ontario Ministry of Agriculture, Food and Rural Affairs.
The information in the document provides important support for those wishing to provide a better life for unwanted horses by running rescue or rehoming farms or for those who are providing sanctuary or retirement places. It includes information on nutritional management for thin or starving horses, body condition scoring, working with an equine veterinarian to identify and manage the most common issues these horses may face, and other helpful information. It also incorporates the standards from the Canadian Code of Practice for the Care and Handling of Equines and self-assessment guides to ensure compliance to the standards of welfare.
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