How to Protect Your Retirement Savings From a Crash. While 56% of investors believe they'll have enough money to retire, 65% said they were unaware that expected returns are predicted to be far lower in the future than they've been in the past. So what can you do to protect your retirement savings in the event that the market crashes? You may need to rebalance your portfolio to ensure your investments are aligned with your risk tolerance, otherwise, you could stand to lose a lot of money if the market tanks. If much of your income is going toward a mortgage, loans, or credit card debt, you're not in the best position to save as much money as possible. This begs the question, though, of whether it's best to put that money you've saved toward your debt or into your savings fund. Again, the money you invest should be money that you won't need for at least five years, so it's wise to pay down as much debt as you can so you can be sure you won't need to pull that money out of the market if a financial problem pops up. Nobody wants to think about the stock market crashing, but the good times can't last forever. Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. You can't go back and buy Amazon 20 years ago…but we've uncovered what our analysts think is the next-best thing: A special stock with mind-boggling growth potential.
The Vanguard Target Retirement 2045 Fund (NASDAQMUTFUND:VTIVX) is a target date mutual fund aimed at those who intend to retire in or around the year 2045. By setting up this fund as a one-stop solution for investors looking for simplicity, the Vanguard Group aims to make it easier to save toward retirement. The fund invests in a number of other Vanguard-run investments, and its asset allocation shifts over time to become more conservative in its investing style. By making changes to the proportion of stocks and bonds in the portfolio, Vanguard Target Retirement 2045 can be a lifelong answer for those who are in their 30s now and are looking to retire roughly 25 to 30 years from now.
What is the Vanguard Target Retirement 2045 Fund’s objective?
The Vanguard Target Retirement 2045 Fund’s objective is consistent with Vanguard’s broader philosophy that covers all of its target retirement funds. The fund keeps a well-diversified portfolio, decreasing stock market exposure gradually over time in favor of increasing bond allocations as the fund’s target retirement date approaches. That trend continues for seven years after the retirement date, at which point the fund mimics the investment philosophy of Vanguard’s Target Retirement Income Fund.
Vanguard advises investors to consider this fund if you’re planning to retire between 2043 and 2047. That corresponds roughly to those born between the late 1970s and the mid-1980s, which picks up most of those in their 30s right now.
What is Vanguard Target Retirement 2045’s asset allocation strategy?
Vanguard Target Retirement 2045 currently has an overall asset allocation of about 90% in stocks and 10% in bonds. That seems appropriate for a fund with a time horizon of 28 years before retirement, as it lets investors be more aggressive in their investments in response to the fact that they have plenty of time to recover from any short-term downticks in the markets.
In particular, Vanguard Target Retirement 2045 has allocations to the following four Vanguard mutual funds:
Vanguard Total Stock Market Index Fund