Do you plan to retire in 2055? For some reason, that particular year strikes me as the distant future. It’s only 45 years from now — a year today’s 20-year-olds will be checking out of the cubicle and checking into active adult communities. Perhaps it’s because it’s one century after the year Dr. Brown had the idea for the flux capacitor and Marty McFly encountered his mom and dad as teenagers, back in time.
Vanguard is catering directly to teenagers and recent former teenagers with a new target date fund with 2055 as the target year. Target date funds are designed for investors who want a simple way to have a portfolio with age-appropriate risk exposure that changes over time as the retirement date approaches. We’ve explored the drawbacks and benefits of this hands-off approach to asset allocation and portfolio management, and if it means anything, I do not have use a target date retirement fund for myself.
The Vanguard Target Retirement 2055 Fund launched yesterday with a low expense ratio of 0.19% with 90% of the portfolio in stocks and 10% in bonds. You’ll also need a minimum of $3,000 to begin investing in this fund. Other brokerages have yet to catch up with Vanguard. Fidelity’s farthest-looking target date fund is calibrated for a retirement year of 2050. T. Rowe Price does offer a 2055 fund with a similar current allocation as the Vanguard fund but with a significantly higher expense ratio of of 0.79%.
It’s going to be difficult for Vanguard to market this investment to its intended audience. These probably work best in 401(k)s that new employees enroll in automatically. With a typical life of working until the age of 65, today’s 20-year-olds are either not thinking that far into the future or are wary of the stock market given its recent recession and volatility.
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I am in favor of removing banks from the lending process, and peer-to-peer lending has matured into offering some of the best deals in the industry. Lending Club is currently running a promotion for new borrowers, sweetening the deal for those who either want to consolidate their credit card debt or want to borrow money for any other reason. 
the Consumerism Commentary Podcast interview with Renaud Laplanche, co-founder and CEO of Lending Club, and Rob Garcia, senior director of product strategy and the brain behind the DebtBuster Challenge. Most of the interview focuses on peer-to-peer lending from the standpoint of the lender or investor, but there is important information for borrowers as well. 
New Staff Writer, Facebook Giveaway, and Best of November
This article was written by Flexo in Administration. 14 comments.
Thanks to all the Consumerism Commentary readers who commented or emailed me about the auditions for staff writer. I’d like to welcome Kelly Whalen, a writer whose primary website is The Centsible Life, to the Consumerism Commentary team! Kelly will be providing one article a week starting this Thursday. Tom Dziubek and I will speak with Kelly on a future Consumerism Commentary Podcast so subscribe now to learn more about our new contributor.
Facebook giveaway
This week, Consumerism Commentary will be giving away a copy of Excuse Me, Your Job is Waiting: Attract the Work You Want by Laura George. I reviewed the book here. The book is a few years old but it is a great resource for today’s economic conditions. In order to be entered in the giveaway, you must be a fan of Consumerism Commentary on Facebook.
Simply being a fan gives you one chance to win, but if you write on Consumerism Commentary’s wall to leave a tip for us, you will quadruple your chance to win. You must be a fan and leave your message by Friday, December 11 to qualify.
Best of Consumerism Commentary, November 2009
The Consumerism Commentary Podcast featured a number of great guests in November. This past month we discussed gift cards with Jim Sharvin, CPA, social and peer-to-peer lending with the CEO of LendingClub, finding a job with headhunter Nick Corcodilos, frugality with author Sharon Harvey Rosenberg, and investing for retirement with author Dan Solin.
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