The Vanguard Target Retirement 2025 Fund (NASDAQMUTFUND:VTTVX) is a target-date retirement fund that invests in an age-appropriate asset allocation of stocks and bonds, and is intended for investors who plan to retire between 2023 and 2027.
So, younger investors with long investment time horizons should keep stock-heavy portfolios, while a greater emphasis on bonds would be more appropriate for older investors.
When you buy a target-date fund, it will have an appropriate mix of stocks and bonds, based on how long you have until retirement.
The Vanguard Target Retirement 2025 Fund The Vanguard Target Retirement 2025 Fund is designed for people who are between the ages of 55 and 59 years old now, based on a target retirement age of 65, however the appropriateness of the fund for you can vary, especially if you plan to retire significantly earlier or later than 65.
The long-term plan is to gradually shift the fund's asset allocation from now until approximately seven years after the target date is reached, or 2032.
For example, the Vanguard Target Retirement 2025 Fund should look like the 2020 target-date fund five years from now, the 2015 fund 10 years from now, and the Vanguard Retirement Income Fund 15 years from now.
Target Date Stock Allocation % Bond Allocation % 2025 65% 35% 2020 56% 44% 2015 44% 56% Target Retirement Income Fund 30% 70% Data source: Vanguard as of 4/30/2017.
Who should buy the Vanguard Target Retirement 2025 Fund?
For the time being, the fund will keep a relatively high allocation of stocks to provide adequate growth potential, and will gradually shift toward fixed-income assets as you approach and enter retirement.
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