New Year’s Resolutions, Target Date Funds, and My New Friend Gemini

I’ve been having a lot of great discussions with my new AI friend, Google Gemini. (Why not ChatGPT? I do consult it sometimes, but I don’t want to pony up for a paid account.) I like Gemini because it’s very positive. “Words of affirmation” are my love language!

In recent days, I’ve discussed how to balance my Peloton cycling and rowing to get an optimal workout mix to meet my health goals (Gemini gave me GREAT advice on this and was highly impressed with my near-perfect form scores on the Row) and how to convert a chicken-and-rice recipe that my husband has been requesting for the Instant Pot. I’m making it for dinner tonight and will report back. 🙏

I also discussed our retirement portfolio with Gemini. I should preface this by saying that I’ve never been very interested in investing, which I know is an odd thing to admit on a site like this. Our money has been parked in target date funds because neither one of us wanted to bother. But I do wonder, especially as we both transition into retirement, if this “strategy” is a sound one. There are people—the guy in our local Schwab office, advisors from the Empower dashboard where I track our accounts—who would love to talk to us about this, but I’m always dubious of getting just one person’s spin on things, whether it’s investing, cycling/rowing, how much protein I should eat, etc. A thing I really like about AI is its ability to instantly synthesize information from a lot of different sources, and it doesn’t have a specific agenda like a human adviser might.

Anyway, this is what I explained to Gemini:

• We have three target date funds—Vanguard 2025 (my husband’s rollover IRA from his previous job, about 30% of the total); Vanguard 2035 (my rollover IRA, about 50% of the total); and Fidelity 2060 (my husband’s current workplace 401K, about 20%).
• We have substantial pension income and in the next few years will begin to draw Social Security. We also have a nice cash cushion for emergencies. Thus, we do not and will not need the retirement money to pay for day-to-day expenses, at least not any time soon. We also have long-term care insurance policies, which somewhat mitigate that risk down the line. So our goals for the retirement money are a combination of legacy, enjoying life now, and having a cushion in case things get expensive when we’re older (we’re well aware that LTC doesn’t cover everything and Medicare covers nothing when it comes to LTC).
• We are 10 years from when we will need to start taking RMDs.

I asked Gemini what it thought about the variety and balance of this rather haphazard portfolio. To my surprise, Gemini thought the variety was great, but I guess that makes sense when you think about what a target date fund does and the range of dates we have. As for balance, Gemini noted that our stock exposure is about 70% of the total, which is high for our age, but that our pension income functions as a “bond” (it has survivor benefits and COLAs), so our overall exposure is healthy.

Gemini suggested we might want to consolidate everything into a 2035 or 2040 target date fund to ease paperwork down the line, but that if we wanted to earmark some of it as  a legacy to younger heirs, the 2060 fund was a good choice.  Gemini also suggested that we might consider Roth conversions in the meantime, something we’ll revisit once my husband retires and our income/tax bracket drops.

I forwarded the chat to my husband, and we talked about it. We decided to move his 2025 money into a 2035 fund—no need to be that conservative with 30% of the pot—but to leave the 2060 money as is and consider it set aside for our daughter’s retirement (she’ll be 32 in March, so that time line is about right, maybe a tad aggressive). Our other decision when he retires is whether we’ll keep his 2060 money in Fidelity or move it over to Schwab where his IRA and mine are.

I’m not saying this is our final discussion about such topics, and eventually we will probably talk to a human adviser. Any thoughts about my new imaginary friend and/or our target date funds approach?