Glide path of TDF is about 90/10%. The reason TDF underperform is becasue it contains 10%+ bond and about 40% of the equity is international, which hasn't perform well for a while. Your portfolio seems fine. The question is why do you want to move away from TDF, you mentioned it's because it return less than S&P 500, but S&P is a less diversified portfolio. If you were to just switch your TDF to S&P500, it would probably increase your risk.
Personally, I don't use TDF mostly because they were not avaiable when I started investing and they complicate asset location a bit. Over the years, I have grown to appreciate TDF more mostly for its ability to hide details on your portfolio. With something like a 3-fund portfolio, you are supposed to reduce risk by following through and selling your rising asset and buying your falling assets. In practice, a lot of people have trouble doing that and may even do the reverse. You can definitely replace TDF with separate funds since most of the funds are tax deferred, but will you be able to follow through?
Personally, I don't use TDF mostly because they were not avaiable when I started investing and they complicate asset location a bit. Over the years, I have grown to appreciate TDF more mostly for its ability to hide details on your portfolio. With something like a 3-fund portfolio, you are supposed to reduce risk by following through and selling your rising asset and buying your falling assets. In practice, a lot of people have trouble doing that and may even do the reverse. You can definitely replace TDF with separate funds since most of the funds are tax deferred, but will you be able to follow through?
Statistics: Posted by gavinsiu — Wed Feb 26, 2025 9:57 pm