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I checked and called Vanguard. The 2040 fund is good if you want to deposit and forget it. Most of the stocks are actually VTI, however, it has not been around 10 years. The comparables yielded 6% over 10 years which is not good. I need something close to 10% to put me in the 6 figure range. VTI is an etf and there are fees involved for trading which I do not understand but the yield is 10%. For some reason, the calls keep dropping. I will call back tomorrow. The rep mentioned my return would be $48,000 in 25 years at 6 % and $108,000 at 10%. Does anyone know the formula to do this calculation?
I would just put it into Vanguard index funds. Build a 3-fund portfolio so you have a little international stock and domestic bond exposure.
You can set it and then forget it. Just rebalance to your target asset allocation once a year (takes 15 minutes or less). If you want to make the allocation more conservative as you get older like the target date funds do, you can do that too (but at your own risk tolerance rate).
I use the below 3-fund portfolio myself:
Vanguard Total Stock Market Index Fund (VTSMX)
Vanguard Total International Stock Index Fund (VGTSX)
Vanguard Total Bond Market Fund (VBMFX)
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