Advice on switching from TDC

Here’s a breakdown of your situation and considerations:

Control Over Allocation: If you prefer a different U.S./International split than the TDF provides, switching gives you flexibility.
Avoid Bonds: Many TDFs include bonds even at younger ages, which may not align with your growth-oriented goals.
Cost Efficiency: If the TDF’s expense ratio is higher than VTI/VXUS or comparable funds, switching can save on fees.

Pros:
- Low-cost, diversified exposure to global markets.
- Greater flexibility in adjusting allocations to suit your preferences.
- No forced bond exposure at this stage.
Cons:
- You’ll need to rebalance manually or set up auto-rebalancing (if your plan allows it).
- International equities can underperform at times, requiring patience to stay the course.

Red Flags:

Ensure your 401(k) plan allows access to VTI/VXUS or similar ETFs/mutual funds. Some plans may only offer mutual fund equivalents or proprietary funds.
Check for additional transaction fees or restrictions in your 401(k) plan when selecting new funds.

Changing Future Contributions:
- Go to your 401(k) portal and adjust your contribution percentages to allocate 70% to VTI (or a similar U.S. fund) and 30% to VXUS (or its equivalent).
Reallocating Existing Balances:
- Most 401(k) plans allow you to rebalance your current holdings.
- Navigate to your plan’s “Rebalance” or “Transfer Funds” section and choose to sell the TDF and allocate the proceeds to your new funds.
Fees or Restrictions:
- Confirm whether selling the TDF will incur any fees (e.g., short-term redemption fees).
- Ensure the new funds you choose have competitive expense ratios and no hidden costs.

Risk Management: If you decide to avoid bonds entirely, ensure you have other safeguards in your financial plan (e.g., an emergency fund and appropriate insurance).
International Allocation: 30% international is reasonable, but you can adjust up or down based on your research and risk tolerance. Vanguard recommends 20-40% international equity in portfolios.

Confirm fund availability in your 401(k) and expense ratios for VTI/VXUS or equivalents.
Make the allocation changes in your 401(k) portal, adjusting both current balances and future contributions.
Set a reminder to rebalance your portfolio annually or whenever your allocation drifts significantly.