Vanguard Target Retirement Fund: 2045 vs. 2050?

I'm turning 22 years old and I'm planning on starting a Roth IRA with Vanguard. If you compare the holdings on the two funds...

https://flagship.vanguard.com/VGApp/hnw/...
https://flagship.vanguard.com/VGApp/hnw/...

The differences are that the 2045 fund has a total of $1.7 billion invested, while the 2050 fund has $78.8 million. The investments are distributed close enough that I would call them equal.

The biggest thing I am considering right now between the two funds is that the 2050 fund is $24.17 and the 2045 fund is only $15.36. Also, the 2050 fund was started in 2006, while the 2045 fund was started in 2003.

Because the 2045 fund is cheaper and it invests in the same holdings, is there any reason I would want to purchase the 2050 fund? I am obviously investing for the long term, and I will hold more shares with the 2045 fund, which would lead to larger growth, I would think...

The cost per share is meaningless. In the end you are still investing $X into either fund. Look at their performance history - you will see similar %/yr = but the higher-priced fund will probably shore more $/sh gains in a given year. But what you are really iunterested in is the %/yr gains.

I would usually tend to select the longer target dates - these are a bit more aggressive in their mix of bonds, stocks, large-cap, small-cpa and international. Since you are 22 you can afford to me on the aggresive side.

Remember that Target Date funds' asset allocations change with time. By the year 2040, these funds will be heaviliy invested in bonds - which may not be as aggressive as you wish to be at age 45.

The price of each share is irrelevant.

You want to pick the one that matures closest to your expected retirement year. If you expect to retire in 2045 then pick that one. If you expect to retire in 2050 then pick that one.

The amount invested in each is also irrelevant.

The target retirement funds can be good vehicles as they automatically adjust the asset allocation as time passes so that it's appropriate given the target date but you need to learn much more about investing in order to make an intelligent choice.

You misunderstand the nature of mutual fund shares, I'm afraid. Which is worth more, one hundred $1 bills, or five $20 bills? The price is irrelevant...

If you are 22 years old, you will probably not be retiring until 2050, therefore the 2050 fund will better suit your needs. The difference between these two funds is the ASSET ALLOCATION, which will grow more conservative over time, so that it is completely "safe" by the time you retire. If you put money in the 2045 fund at age 22, you will lose 5 years of potential growth. Since aggressive investments double (on average) every 7 years, could end up with 2/3 as much money when you do retire.


I think you need to do some reading!

Can't get this lazy. price means nothing. Both funds are not good vehicles at all. No 1 stop shopping. Setting up acct with Vanguard bad in itself. Got to schwab or other full-line company. Need closed end funds and etf to build a solid portfolio. no 1 acct does it all and you are stuck with that here. ADx PEo EWA PGJ etc