What Jack Bogle’s Investing Approach Can Mean for Those Nearing Retirement

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You do not have to spend your time combing through earnings releases and analyst forecasts to build wealth. In many cases, a straightforward investing strategy is enough to help you work toward long-term financial goals.

Vanguard founder Jack Bogle helped popularize low-cost investing, opening the door to more affordable mutual funds and exchange-traded funds (ETFs). For people in their 50s who are approaching retirement, that approach can be useful when thinking about how to adjust a portfolio to fit changing goals, risk tolerance and time horizon.

Why lower fees can compound into real savings

Choosing low-cost index funds rather than products with much higher expense ratios may not make an immediate difference, but the savings can grow over time. Many ETFs track the S&P 500 and other widely followed benchmarks while charging less than 0.10% in fees. By comparison, funds with a 1% expense ratio are much more expensive.

For example, an investor with $500,000 in funds charging a 1% expense ratio would pay $5,000 in annual fees. The same portfolio in funds with a 0.25% expense ratio would cost only $1,250.

Why a simpler portfolio can be less risky for later-stage investors

Bogle favored owning a small number of broad index funds and keeping them for the long term. That kind of structure avoids concentrating too much money in one stock or one sector. It can still benefit from market gains, while often limiting losses during downturns and corrections.

Making regular purchases through dollar-cost averaging, such as investing every month, and holding those investments over time can also help keep emotions from driving decisions.

Applying Bogle’s ideas in your 50s

Putting Bogle’s approach into practice later in life does not necessarily require a dramatic overhaul. Start by reviewing what you own and how much you are paying in fees. If your portfolio is not spread across assets such as stocks and bonds, domestic and international holdings, or companies of different sizes and sectors, consider funds that provide broader diversification. If fees are higher than you want, you may choose to move away from expensive funds and into lower-cost options.

As retirement gets closer, it may also make sense to maximize retirement contributions so you can take advantage of tax benefits. Roth accounts can offer tax-free withdrawals, while traditional retirement plans allow tax-deferred contributions.

It is worth looking at your current tax situation and the bracket you expect to face later to decide which account type fits best. Tax diversification can also help manage risk and expenses in retirement, since many investors spread money across employer-sponsored plans such as 401(k)s, individual retirement accounts (IRAs) and taxable brokerage accounts.