What Target-Date Funds Can and Can't Do

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The Big Flaw in Target-Date Funds

Target-date funds are supposed to manage clients' retirement or college savings based on their changing risk tolerance as they age. Unfortunately, current target-date funds are designed for death, not distribution, leaving the account too exposed to risk at the target date. Careful due diligence is needed.

Comparing Glide Paths in Target-Date Funds

A good way to choose a fund for clients' retirement assets is to investigate the glide path's asset allocation and monitor its volatility as the target date draws near.

Surprising Results in Q1 Stock Returns

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Why Target-Date Funds Work

Critics charge that target-date funds are more complicated than balanced funds and riskier than other asset allocation approaches. However, target-date funds offer behavioral incentives for staying with the investment, and predictability that other strategies don't. Here's the rundown on the pros and cons.