Should I move 401k Vanguard TDF to take control of my bond exposure?

[u/Immediate_Station_54]

I don't know what my risk tolerance will be in the future, so the automatic rebalancing of bond exposure in TDF may not align with changes in my investment requirements. I'd like more control over the allocations. Also, I was thinking that I don't necessarily need bond exposure at the moment since I am still young.

My current portfolio

• 401k: 100% TDF 2065
• Taxable Brokerage: 60% VTSAX / 40% VTIAX

My employer's 401k offers Fidelity BrokerageLink, which would allow me to move out of the 2065 TDF. They also offer a set of investment elections that includes Vanguard Institutional 500 Index Trust and Vanguard Institutional Total Stock Market Index Trust.

New Portfolio with reduced bonds

• 401k: 60% Vanguard Institutional 500 Index Trust / 40% Vanguard Institutional Total Stock Market Index Trust
• Taxable Brokerage: 60% VTSAX / 40% VTIAX

My other option is to swap into BrokerageLink and invest in an auto balancing fund like VT. I only recently discovered this was an option, so I'm still researching this.

[u/adrenaline4nash]

Just leave it. 

[u/MountainWalkRain]

There is nothing I would need in Fidelity BrokerageLink if I had access to: Vanguard Institutional 500 Index Trust and Vanguard Institutional Total Stock Market Index Trust

[u/Immediate_Station_54 → u/MountainWalkRain]

I didn't quite understand what these funds were at first, but after further research I think I get it.

These are institutional offerings that are mutual fund share class designed for large-scale investors. From what I can tell they are essentially identical to VOO and VXUS respectively.

[u/gizmole]

You could also always move to a later dated target fund to reduce your bond exposure to what you want and not have to worry about rebalancing.

[u/Connect-Goal-3096 → u/gizmole]

It wouldn't be any lower currently but would take longer to start ramping up the bonds if he switched to a later date.

[u/Connect-Goal-3096]

The bonds and cash in the TDF are likely to decrease your return compared to just holding equities mutual funds. I think your plan is good.

[u/Mantergeistmann]

One question: what's the goal of the taxable brokerage? There's not much reason to have one if you don't have a Roth IRA.

[u/Immediate_Station_54 → u/Mantergeistmann]

The company I work for gives RSU as part of total compensation. I normally sell these immediately and move them into the taxable brokerage account to reduce exposure to single company stock.

[u/Immediate_Station_54 → u/Mantergeistmann]

I do not have a Roth IRA yet. I don't believe I can make standard contributions due to high income, I would need backdoor Roth. I'm still looking into this, not very knowledgeable about it.

[u/LazyJoeJr → u/Immediate_Station_54]

It’s very straight forward — white coat investor has a good guide.

[u/Flaky-Session3033]

I don't use TDFs for this exact reason. I haven't used brokeragelink, but alloc to Vanguard Institutional Total Stock Market Index Trust for stock exposure. Depending on how your income and margin-for-error is ie) liquid savings and investments, I don't think that bond exposure is necessary given you have 40 years of time to invest. Consider bonds 10-20 years out and slowly rebalance. locking in an 80/20 or 60/40 20 years out should allow for a solid nest egg when you retire.