Their expense ratios are pretty decent: https://personal.vanguard.com/us/funds/vanguard/all?sort=nam...

And, the idea of the target funds is that they become more conservative as you reach the target. The pure index funds do not. So they are basically index funds with portfolio rebalancing.

https://institutional.vanguard.com/VGApp/iip/site/institutio...

Vanguard Target funds are nothing but a collection of passively managed index funds. The ER is slightly higher than doing it a la carte, but it re-balances without having to worry about it.

it is only higher if you qualify for admiral shares in all the funds contained in the target fund. With the current case of most target funds having a 2% holding in International Bonds, you would need to have $500,000 invested to make it cheaper to buy the individual funds.

Yes, Vanguard is a lot better than others in this regard, that is true. But the fees are still higher. Automatic re-balancing is nice, but it's not like balancing a portfolio is anything to "worry about" once you figure out the basics (which you should).

There's also the fact that not everyone's 401k is offered through Vanguard. For example, if you're stuck with Fidelity like I am, then you will definitely need to avoid their mutual funds and choose their index funds instead. (With 401k, you cannot pick a fund outside of the broker that manages it.)

The MER for the Vanguard Target 2030 is 0.17%. Stated differently: 0.0017.

Yes, it's slightly lower if you buy all the composing Vanguard index funds individually, but for an index card comment, I'd say it's good enough.

(Minor quibble: index funds can be mutual funds or ETFs)

Good point, although I think he implicitly implies "index funds" in this case because later there's a bullet that says:

* Pay attention to fees. Avoid actively managed funds.

An article that elaborates on your point:

http://www.forbes.com/sites/baldwin/2013/06/05/the-trouble-w...

Vanguard mutual index funds are very cheap. I'd recommend them.