I enjoy the target date funds, but what I don't fully understand is why the 2060 fund is a 0.37% expense ratio while the 2065 is a 0.09%. Regardless, I've played with some calculators and it seems like the difference between 0.37 and 0.09 is the matter of over 200,000 after 40 years of investments.
2060 more closely matches my theoretically retirement age (though I plan to retire before that age anyway), even over 30 years it's about a 70k difference (which is a year of retirement).
I can't imagine the small/large cap, bonds, etc etc. diversification are very different in a 2060 vs 2065, especially this far out from the target date.
So is there any reason to pay the higher expense ratio? I also don't understand why both funds list 0.09% ratio on Morningstar, but the 2060 is a 0.37 on the 401k portal/website.
Thanks for the help.
original posted by MetallicGray to r/personalfinance on Tue, 27 Feb 2024 08:42:46 GMT.