<prompt> Human: Hello all,I have been contributing to a Vanguard IRA target fund VTTSX with an expense ratio of 0.16 since Oct of 2013.My wife and I opened a second account for general investment purposes in December 2014, and for that we are contributing to VFIAX, which just recently changed their expense ratio to 0.04.I am thinking of convertingexchanging my VTTSX for VFIAX or a similar fund with a lower expense ratio, but are there any drawbacks to doing this? I know that the lower expense ratio is important, but will I lose out on any time invested in VTTSX? This the question I cant really seem to find an answer for.How, if at all, does this affect future compound interest or my investment overall?Thanks in advance,-G  <response>: Time invested in a particular fund doesnt much matter when dealing with shifting investments in an IRA. In taxable accounts, there are long-term vs. short-term capital gain tax implications when you sell, but that doesnt apply to IRAs. Whatever balance you have in your current target date fund can be converted to any other investment option as-is.As others have posted, the VTTSX is intended as a blended fund of funds its actually built up of four other Vanguard index funds with an asset mix appropriate for the time remaining until retirement. That mix shifts as you get closer to retirement. Its currently 54 US stock 36 International stock 7 US bonds 3 International bonds. At around 2035, the VTTSX fund starts shifting out of the stocks into bonds to give a more stable but smaller growth potential balance.One option that you could look into is recreating the fund mix of the target fund using the Admiral Share versions of the underlying Vanguard funds. Target funds are built from Invester Share class funds, which have higher relatively speaking expense ratios. The target funds expense ratio is just a weighted average of those funds ER. The first catch is that the Admiral funds have a higher minimum investment 10k for most, so youd need a large enough balance to have at least 10k in each or at least most of the funds. Further investment above that 10k can be done in any amount, so if you had 10k already invested in VTSAX the admiral fund for US total market, you can buy 100 more with no problem.The second catch to going this route is that you no longer get the Target Date funds automatic rebalancing. So you would then have to take time once or twice a year to shift money from, say, the stock funds to the bonds to keep your asset mix appropriate with your retirement timeline.Converting your target fund to admiral share funds would shave off roughly 0.1 of the expense ratios of what you have invested. In raw dollar terms, for every 10k you have in your IRA, this would save you 10 a year. Even with compounding over the next 40 years, that 10 a year is only a difference of a couple thousand dollars at retirement hopefully a very small percentage of your nest egg.Unless you think the extra investment and work required is worth the little bit of saving on the ER, leaving your IRA investments in the Target fund is a perfectly fine choice. Its when your balance gets to 100s of thousands of dollars or current investments ER is at or above 1 that reducing ERs starts to make a big difference in your final results. 