via Wall Street Journal
Retirement-plan investors often aren’t sure how to allocate the money they’re socking away in their 401(k) accounts. So the rise of target-date funds—which automatically shift investors’ money from stocks to fixed income gradually over the years—has been widely heralded as a victory for the country’s retirement readiness.
Indeed, many employer-sponsored retirement plans now use target-date funds as their default option when employees are automatically enrolled. Target-date funds are expected to hold about 35% of total 401(k) assets by 2019, up from 13.5% in 2013, according to Cerulli Associates, a research firm based in Boston.
But is this really a good thing?