Fears About Target Funds

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?


About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
This entry was posted in Uncategorized. Bookmark the permalink.