7 Great Retirement Funds for the Nifty Fifty Crowd

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Although we’re thankfully on the edge of returning to normal, the novel coronavirus pandemic left an unwanted mark on society. Due to the egregiously high death count, the average U.S. life expectancy dropped by a year in the first half of 2020. Cynically, about the only good news from this shocker is that it implies millions of people don’t need to aggressively buy retirement funds.

Adding to the pessimism, the Covid-19 outbreak isn’t the sole reason for the declined projection. According to the Centers for Disease Control and Prevention (CDC), a “surge in drug overdose deaths are a part of the decline, too.” Again, this brings up a terribly cynical argument. If we’re going to bite the dust — and sooner as recent data suggests — we shouldn’t be too concerned about retirement funds.

Then again, you shouldn’t live your life based on such statistical trends. For one thing, the Covid-19 impact is probably a one-off affair. Since the last major pandemic of this magnitude was the 1918 influenza global outbreak, chances are, you’re not going to live long enough to see the next crisis. And that may mean life expectancy can rise, thereby incentivizing savings into retirement funds.

Second, if the Biden administration is successful in rolling out its ambitious infrastructure plan, deaths of despair may decline. Sadly, one of the reasons for drug overdoses is that people are no longer productive for various reasons. Particularly, if society can address the crisis impacting American men, overall societal health should rise. This too will boost the narrative for retirement funds.

Plus, medical technology is improving all the time. Ironically, the Covid-19 crisis may end up sparking a renaissance in such advancements, leading to an increased lifespan. Therefore, if you’re in your 50s, you don’t want to despair. Instead, you need to prepare for a potentially lengthier stay on this planet than you anticipate. These retirement funds will help you for the very long haul.

  • Vanguard Target Retirement 2035 Fund (MUTF:VTTHX)
  • Vanguard Target Retirement 2045 (MUTF:VTIVX)
  • Vanguard Target Retirement Income Fund (MUTF:VTINX)
  • Northern Global Tactical Asset Allocation Fund (MUTF:BBALX)
  • Fidelity Advisor Equity Growth Fund (MUTF:EPGAX)
  • T. Rowe Price Retirement Balanced Fund (MUTF:TRRIX)
  • Baird Aggregate Bond Fund (MUTF:BAGIX)

Finally, Americans are recognized throughout the world for their can-do spirit. Even if you haven’t put a dime into your future, you should never think it’s too late. Get on track right now with these retirement funds.

Retirement Funds: Vanguard Target Retirement 2035 Fund (VTTHX)

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For those on the older side of the 50s demographic (or perhaps on the younger side of your 60s), you may want to look into the Vanguard Target Retirement 2035 Fund. Featuring a diversified portfolio, the VTTHX fund incrementally decreases exposure to stocks and increases exposure to bonds as it reaches the target retirement date. Therefore, you can rest easy as you work toward socking your money away into this fund.

Better yet, the VTTHX has an expense ratio of 0.14%, which is 69% lower than the average expense ratio of retirement funds with similar holdings. Indeed, you want to keep your costs down because over time, a high expense ratio can eat away at your returns. With all that’s going on right now, the last thing you need is a smaller nest egg due to a lack of preparatory investigation.

Currently, the VTTHX features a 73.36% allocation toward stocks, 25.55% toward bonds and 1.09% toward short-term reserves. Additionally, this is one of the retirement funds geared toward a higher-risk, higher-return profile.

Vanguard Target Retirement 2045 (VTIVX)

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I’m sure you saw this one coming a mile away but I’m going to mention it anyways. For those who are on the younger side of the 50s spectrum (and those who are approaching the threshold), you may want to consider the Vanguard Target Retirement 2045. As with the 2035 fund, the VTIVX presently features a diversified portfolio. But as it gets closer to the target retirement date, you’ll see a rotation into risk-off bonds from risk-on stocks.

To be sure, a target date of 2045 puts those in their early 50s well into their 70s. That might sound like an incredibly old age to retire. But here’s the thing — advancements in medical technologies allow us to live longer than before. Further, access to various information such as dietary routines may not just keep us alive in our advanced years; we may be quite vibrant.

The expense ratio for the VTIVX is 0.15%, which is 67% lower than other equivalent retirement funds. Also, it features the same higher-risk, higher-reward profile of the VTTHX.

Retirement Funds: Vanguard Target Retirement Income Fund (VTINX)

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Primarily, this list of retirement funds is aimed for those working their way toward a financially secure future. However, if you’re one of the fortunate folks who are already retired in their 50s, then you may want to consider the Vanguard Target Retirement Income Fund.

In this case, the VTINX isn’t about working toward a particular retirement goal but rather generating cash flow. While the advancements in medical technologies and other health-centric solutions I described earlier help us live longer, a not-so-pleasant downside exists: we may end up outliving our resources. To better ensure that doesn’t happen, you have retirement funds like the VTINX.

As you might expect, this income fund is geared heavily toward bonds in a 70/30 split with stocks. In addition, this income fund is near the lower end of the risk-reward profile. This ensures a higher probability of stability while giving you solid cash flow.

The expense ratio of the VTINX is 0.12%, which is 75% lower than other retirement funds with similar holdings.

Northern Global Tactical Asset Allocation Fund (BBALX)

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Generally speaking, American investors will do well focusing the majority of their funds in domestic opportunities. Despite plenty of geopolitical rumblings, there’s no country like the U.S. From our massive financial infrastructure to the ownership of the world’s reserve currency, it doesn’t get any bigger or better than Wall Street.

Of course, that’s not guaranteed to stay true indefinitely. Emerging markets like China and India, with their expansive population now carry considerable clout. They could very well dictate terms by the time those in their 50s are in retirement age. Therefore, I think it makes sense to consider Northern Global Tactical Asset Allocation Fund.

According to its prospective, the BBALX fund features an “optimal and efficient mix of global equities, fixed income, real assets and cash in an effort to outperform the fund’s 60/40 blended benchmark.” Adding to the narrative for BBALX is that plenty of growth opportunities exist in international sectors, whereas the domestic blue-chip market is undeniably mature.

One factor you must watch out for is that the net expense ratio for the BBALX is 0.56%, which is on the higher side compared to the retirement funds on this list.

Retirement Funds: Fidelity Advisor Equity Growth Fund (EPGAX)

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In September 2019, the Wall Street Journal reported that “Funds that track broad U.S. equity indexes hit $4.27 trillion in assets as of Aug. 31, according to research firm Morningstar Inc., giving them more money than stock-picking rivals for the first-ever monthly reporting period.”

It was quite a watershed moment. Then, the SARS-CoV-2 virus had something to say on the matter. In May of last year, the WSJ stated “Stock sectors with the heaviest amount of passive ownership—by index funds and sector-focused ETFs—fell even more than the broad market during the selloff this year, a study found.”

I don’t want to dive into the passive-versus-active management debate. However, these are very interesting times. If you prefer the real or perceived security of active management for your retirement funds, look no further than the Fidelity Advisor Equity Growth Fund.

Focusing on longer-term growth, EPGAX’s portfolio features an 81.8% exposure to U.S. equities and 17.67% exposure to foreign stocks. Theoretically, this should give you oomph for your retirement plans. However, do keep in mind that active management has its costs. Specifically, you’re looking at an expense ratio of 0.99%.

T. Rowe Price Retirement Balanced Fund (TRRIX)

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Another one of the retirement funds that are designed for those already enjoying not working for a living (or at least working only when they want to), the T. Rowe Price Retirement Balanced Fund accomplishes exactly what its name implies.

Featuring a diversified portfolio that’s exposed to about 40% in stocks and 60% in bonds, the TRRIX fund has a conservative profile. Nevertheless, conservative may be the order of the day considering the wild events that have occurred in the trailing year. Also, if I’m being perfectly honest, recent headlines suggest more turmoil to come. So yes, a stable investment like TRRIX makes much more sense than it ever did.

Nevertheless, I wouldn’t necessarily classify this fund as boring. While retirement funds don’t exactly get people’s juices flowing, the TRRIX has the most exposure sector-wise to information technology. In addition, it carries some to international stocks, emerging markets and small capitalization opportunities.

The TRRIX has an expense ratio of 0.50%, which is slightly lower than what you might get from similar retirement funds.

Retirement Funds: Baird Aggregate Bond Fund (BAGIX)

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Invariably, growth will almost always be a component of any investment, whether you’re talking about speculation portfolios or retirement funds. But as Jesus once told his disciples, man shall not live by growth stocks alone but by every word that proceeds from the chair of the Federal Reserve.

Okay, maybe that’s not exactly what he stated but the point remains: you can’t just go full growth on everything because of inherent market risks. Instead, you need to consider bonds for diversification as well as some income to navigate the occasional choppy waters. For that, you should look into the Baird Aggregate Bond Fund.

Featuring a diverse mix of bonds that cover government, government agencies, industrials and financials, you can rest assured that Baird Aggregate only focuses on investment-grade debt securities. Moreover, BAGIX features a net expense ratio of 0.30%, which is fairly decent for the stability that you’re receiving.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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