Friends, rolling a 401(k) into an IRA opens a giant menu. If a target-date fund used to be home base, should you rebuild that mix with your own funds or ETFs?

The answer hinges on fees, account size, and how much maintenance you’re willing to do—because “DIY” can save a little money, but it also adds real work.

Baseline Mix

A common benchmark for a 30-year-old is the Vanguard Target Retirement 2045. Under the hood it’s roughly 63% total stock, 27% total international stock, and 10% total bond. The fund’s expense ratio is about 0.19%—$19 per $10,000 per year.

Replicating that exact trio using the same “Investor” share class typically lands you at almost the same all-in cost.

As Angus Stewart of Fidelity Investments explains: “Target date funds provide an all‑in‑one fund option that can help individuals stay invested, disciplined, and on track to help meet their financial goals.”

Cost Cuts

Where can DIY win? Cheaper share classes. Vanguard’s “Admiral” shares run about 0.10% on the same building blocks. Catch: minimums. Each Admiral fund generally requires $10,000. Because the bond slice is ~10%, you’ll need roughly $100,000 total to meet that $10,000 bond minimum without skewing the allocation.

Savings: about $90 per $100,000 per year versus the target-date fund.

ETF Route

Prefer lower minimums? Use ETFs. Vanguard’s ETFs mirror Admiral-share fees, often at 0.10% combined for this three-fund setup. Typical costs: $100 per $100,000 yearly. Many brokers charge $0 commissions; bid-ask spreads are usually a few cents.

At Vanguard, a $20 annual brokerage fee applies under $50,000, but electronic delivery waives it. ETFs avoid fund minimums and keep expenses razor-thin.

Other Providers

Fee hunting? Schwab’s total market ETF is ~0.04% and total bond ~0.05%. There isn’t a single “total international” that includes everything, so you’ll assemble it (e.g., developed + emerging). Done well, your blended expense can land near ~0.06%—about $60 per $100,000 annually.

Versus 0.19%, that saves ~$130 per $100,000; versus a 0.10% DIY at Vanguard, about $40 per $100,000.

Hidden Work

DIY means playing portfolio mechanic. Rebalancing: set drift bands (±5 percentage points) and check quarterly or semiannually. Use new contributions first; sell only if needed. Glide path: gradually shift more into bonds as retirement approaches, rather than guessing during volatility.

Taxes: in taxable accounts, realized gains can bite; tax-loss harvesting helps, but respect wash-sale rules (avoid repurchasing “substantially identical” holdings within 30 days).

Behavior Matters

Target-date funds bake in discipline—autopilot rebalancing and a preset glide path. A DIY portfolio demands consistency through good and bad markets. If tinkering is tempting, or time is tight, a low-cost target-date fund’s “set-it-and-forget-it” structure is often worth the modest extra fee.

When DIY Fits

DIY shines if the account is sizable (think $100,000+) and goals call for customization: ESG screens, a small value tilt, or a different bond mix (e.g., Treasuries over aggregate).

You’ll want a written plan: target weights, drift bands, a glide-path timetable (for example, trim stocks 1–2 percentage points per year in your 40s and 50s), and a rebalancing calendar.

When Fund Wins

For smaller balances, or if simplicity is paramount, a target-date fund’s 0.19%ish fee is already low. It delivers instant global diversification, automatic rebalancing, and age-based de-risking with zero maintenance. That convenience can protect investors from the far costlier mistake—buying high, selling low, and missing compounding.

Quick Recipe

Want the three-fund DIY equivalent as a starting point?

• 63% total stock index (ETF or Admiral)

• 27% total international stock index

• 10% total bond index

Estimated annual cost: ~0.10% at Vanguard ETFs/Admiral shares (~$100 per $100,000). Rebalance when any sleeve drifts beyond ±5 points. Review annually to advance the glide path.

Practical Costs

Illustrative annual dollar costs per $100,000:

• Target-date fund 0.19% ≈ $190

• DIY Vanguard ETFs ~0.10% ≈ $100

• DIY Schwab blend ~0.06% ≈ $60

Mind the small frictions: ETF bid-ask spreads, potential premiums/discounts, and any broker account fees. Over 20–30 years, these differences compound—but only if the strategy is followed faithfully.

Setup Steps

Open an IRA brokerage (no load, no commissions). Turn on dividend reinvestment. Automate monthly contributions. Pick the trio (or one target-date fund). Put the asset mix and drift bands in writing. Set two calendar reminders per year: rebalance and glide-path nudge.

Keep the expense ratio front-and-center—sub-0.10% is a strong target for a DIY core.

Conclusion

Lykkers, the choice is simple in spirit: pay a little more for automation, or pay a little less and do the driving. Which fits your time, temperament, and account size today? Share your approach—and the mix you’re leaning toward—so the community can offer practical tweaks before you lock it in.