TDIF Glide Path

I’m still trying to reason with the best/appropriate TDIF glide path (of stocks:bonds) over time.
I am 30 and have TDIF 2060 at vanguard but am debating if I should do a 3 fund index portfolio.

Some people will put 40% bonds at age 40 and at age 41 allocate bonds to 41% etc.

I love TDIF because they are rebalanced automatically and protect me from tinkering with the account.

My concern is the glide path.

For example, at 50 years old which is 15 years away from 65 my portfolio would be 18% bonds only. I feel that is a bit aggressive because at 50 you would accumulate a large sum of money and at that stage you want to protect your assets.
What are your thoughts?

Thanks in advance for your time!

Why would a 30yo want any bonds in his long term growth fund? Makes zero sense to me. IMO you should be 100% in a growth fund until you’re at least 40 yo. And even then, many people smarter than I am believe it might make sense to carry that on even longer.

What you’re doing with 20% bonds in a TDIF is severely restricting your long term growth potential, while only slightly lessoning the blow of a market downturn.

Let’s look at 2 diff accounts. The market drops 30%, and the account with 100% growth funds is down 30%. The account with 20% bonds is down only 24%. Is either account owner going to sell and get out? NO!! They’re both going to stay the course and let the market recover. Three years later, the market has recovered and the growth fund has gained 50%, the fund with bonds has only gained 40%. In fact, the 100% growth fund will always be 20% ahead of the bond fund on the upside, and with your 35 year timeline to retirement, man that’s a lot of money to leave on the table.

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Hi Ala,
Since you are 30 and have a 2060 TDIF, that is towards the aggressive side. Another option is that you can choose 2055 if you want to be a little bit more conservative, so at age ~50 you’d have 24% bonds.

I love that you don’t want to be too aggressive, but we don’t want to be TOO conservative either! We think the TDIF does a great job at balancing the two :slight_smile:

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