Date: Wed, 6 Sep 2006 10:35:41 -0500
From: "jIM" 
Newsgroups: misc.invest.financial-plan
Subject: Re: How aggressive would you be at 26?
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flagsposters@gmail.com wrote:
> Hey folks,
>  I am 26 years old and looking at two retirement stock options:
>
> 1.) Vanguard Target Retirement 2045 which allocates 88% in stocks
>
> 2.) T.Rowe Price 2045 which allocates 94% in stocks
>
> My questions:
>
> If you were 26 today, which one would you go for? I am interested in
> T.Rowe Price because it seems a bit more aggressive, but I am also a
> bit leary of terrorism.
>
> I know that Vanguard is the best, but I am attracted to T.Rowe Price
> becuase it's more aggressive AND is a cheaper initial investment (2,500
> vs Vanguard's 3,000). However, I don't mind just waiting to gather the
> extra $500 for Vanguard's higher initial fee.
>
> Does anyone know if T.Rowe has more expenses and fees than Vanguard?

I compared using Vanguard's web site.

T Rowe does not have a "wrapper fee" and invests in:

Equity Index 500 Fund
Growth Stock Fund
High Yield Fund
International Growth & Income Fund
International Stock Fund
Mid-Cap Growth Fund
Mid-Cap Value Fund
New Income Fund
Small-Cap Stock Fund
Value Fund

I think some of these funds are excellent, including Mid Cap Growth and
Mid Cap Value.  Overall expenses as listed by TRP is .76% which is an
average of fund expenses if I understand correctly.

Vanguard appears to have a wrapper fee of .21% in addition to the fund
expenses.  Vanguard 2045 invests in

Vanguard Total Stock Market Index Fund 71.9%
Vanguard European Stock Index Fund 10.9%
Vanguard Total Bond Market Index Fund 9.8%
Vanguard Pacific Stock Index Fund 5.1%
Vanguard Emerging Markets Stock Index Fund 2.3%

I don't see how terrorism fits in to either of above.  If a terrorist
attack comes, both will go down.  One could argue that because
Vanguard's fund has international offerings, a terrorist attack might
affect it more.

TRP will let you open the account with $50 if you sign up for asset
builder which adds $50 each month.  I do not know if Vanguard has the
same service.

disclaimer:
I own the following funds:

TRP Mid Cap Growth (Roth IRA)
Vanguard Extended Market index (401k)