Target-Date Fund vs DIY Three-Fund
A **target-date fund** is one ticker that shifts from stocks to bonds as retirement approaches. A **three-fund portfolio** (total market, international, bonds) is cheaper at scale but requires manual rebalancing and discipline.
Step by step
1. Compare expense ratios
Target-date funds often charge 0.08–0.15% vs ~0.03% on core index ETFs.
2. Model tax location
DIY lets you place bonds in tax-advantaged accounts strategically.
3. Check glide path
Target-date funds differ in how fast they derisk—compare vintage charts.
Target-date vs 3-fund
Set-and-forget vs lowest cost—many use target-date in 401(k) and ETFs in IRA.
- Target-date: Automatic rebalance; one decision; higher all-in fee sometimes.
- 3-fund DIY: Lower fees; more control; behavioral risk on rebalancing.
Use our calculators
Common mistakes
- Chasing last year's target-date vintage
- Never rebalancing the DIY portfolio
FAQ
Can I hold both?
Yes—common to simplify workplace plans and DIY elsewhere.