You main problem is that you have completely misunderstood, and are misusing the Target Date Fund.
TDFs are "all in " investments. You put ALL your savings in the TDF. If you start "branching out", you will upset your portfolios overall asset allocation.
For example, depending on the value of your Total Stock and Dividend Appreciation funds, your overall portfolio is likely very overweight on U.S. stocks. Both of these funds invest in only domestic equities, so you are not only holding too heavy a stock allocation, but too heavy a domestic stock allocation.
I would advise you to invest all of your retirement funds in the TDF. If you are saving for retirement, then your "outside individual account" needs to be a ROTH IRA (invested in the TDF).
It's not sexy, but TDFs are "all in" funds. They are professionally managed, extremely diversified, age appropriate asset allocation, low cost, and rebalanced for free.
*The TDF is professionally asset allocated and diversified according to your expected retirement age. Asset allocation relates to the percentage mix of the various "asset classes" held in your portfolio. In it's simplest form, the asset allocation will be described by "percentage of stocks" and percentage of bonds".
But "stocks" and "bonds" are very general terms for asset classes. There are small, medium, and large domestic stocks. Dividend stocks. Emerging market stocks. Developed market non domestic stocks. Micro caps. Corporate bonds. Municipal bonds. U.S. government backed bonds. Foreign bonds. Short-term, medium term, and long term bonds. REITs, .......The list of "asset classes" is quite extensive.
The beauty of the TDF is that the managers have allocated nearly ALL of the asset classes in a way that appropriately minimizes your risk while maximizing your gains. The asset allocation is meant to "smooth out" your portfolio's total return. So when one asset class under performs - - your entire portfolio doesn't suffer the full brunt of that asset class's dive.
As I said before, your portfolio (as a whole) probably holds too high a percentage of U.S. stocks because you have opted to purchase "extra" U.S. stocks "outside" your TDF when you bought the Total Stock and Dividend Appreciation funds.
The problem with doing this is that if (when) the U.S. stock market corrects, your portfolio will suffer more than the TDF would have suffered by itself.
ONE MORE THING. If your portfolio is holding more than even 1% of your company stock, you should sell it and invest it in your TDF. While many advisers will differ on the maximum level of company stock they would want you to hold, none of them would advise more than 5%. And the ones who are advising as much as 5% are only doing it because their clients have an inappropriate "love affair" with their company stock, and the advisers don't want to hurt their clients feelings.
I think clients should be told the truth: Holding company stock is a high risk affair that is almost never appropriate - - and certainly not appropriate for someone who has not yet fully funded retirement, kid's college, and paid off their debts. Retirement investors also need to be told that it's a slow, boring trail they're on and they shouldn't try and make it more complicated than it is. They need to be told that "beating the odds" by playing the market and trying to time the ups and downs always fails. (Always).
I'll end with an observation. I can't begin to tell you how many people have complained that they "lost 50% in the market" in '08-'09. But in every case, the person did not have an appropriate asset allocation, or they stopped investing in the downturn (the worst time to stop), or they "took their money out" and did not begin investing again until the market was well into recovery. Or worst of all - - they did all three.
With 30 years to go, your best course is slow, persistent, and steady.
Nothing apparently wrong with that plan. A small crticism is that the target date fund is automatically set up to be appropriately diversified for your age. Diversifying again by using a stock market fund and a dividend appreciation fund is essentially voiding the automatic rebalancing of risk and mix of investments that a target date fund provides. Also, you might consider putting a little more away if you can afford it. 15% to 20% is a good target, and you're just under that.
Here's my question - Vanguard quotes the expense ratio for Target Retirement Fund 2045 as 0.18%. Yet it appears that the fund invests in other funds in the Vanguard family - so does the expense ratio quoted include the expenses of the component mutual funds or did they just not mention that?
I'm not a huge fan of funds that invest in funds because you're paying for two levels of management fees and expenses. It may work it may not - but I would NOT take my eyes of my money - check the results after every quarter - if not more frequently.
It appears to me that this market gimmick of Retirement Target Funds is to lull you into not checking the quarterly or annual results. "Don't worry, sir - we know what we are doing - we're experts!"
Not a single Target Fund "saw" the crash of 2008.
TRUST NO-ONE. The people who "invest your hard-earned pay will be retired with fat bonuses before you get your hands back on your money!
Regarding fund selection, it is a little heavily weighted toward US equity, but I am okay with that...
You are 30, you are going to be continuing to contribute for many more years to come, you can tweak the balance as you age. You should be aggressively positioned today.
Regarding the 7% / 7%... I can see that you are maxing out the employer contribution. But, if you can afford it, consider upping your contribution percentage.
Say you make 100k. You contribute 7k, your employer contributes 7k.
now suppose over the next 30 years we see 2% inflation (including 2% wage growth) and 5% real asset growth (7% nominal returns on your portfolio)
in 30 years time, the equivalent wage is 177 k, your account is worth 1.6 million.
now your have a more conservative allocation, and your assets retirement grows at 5%, it is only paying out 81 k, or 50% of your final year's salary. Are you okay with that lifestyle hit?
If interest rates rise (and they will do so) over the next fifteen years, you will have a very huge loss in your target fund and total income fund, because they hold bonds. the value of the bonds has to decline as the interest rates rise. do not go with any bonds in the next five years at least.
I say investing in stock market it is bad idea....
It looks good to me.
I think you are fine with those choices.
I have Vanguard Total Stock Market Index fund in Individual account, and Vanguard Target Retirement 2045 fund, Vanguard Dividend Appreciation Index fund in ROTH IRA in Vanguard. I picked the 2045 fund because at age 60 I want to be more in bonds than stocks and picked Dividend Appreciation fund for income. Your opinion?
I have a 401k at work and stock in work. I put 7 percent and company matches it at 7 percent.
