Ep. 48: Target Date Funds: The Good, Bad, and Ugly

Liz Whitteberry |
 

Target date funds were introduced in the mid-1990s as a way to simplify retirement investing. These funds are essentially mutual funds that invest in a mix of other mutual funds, tailored to fit a specific time horizon. While these funds are convenient and offer a “set it and forget it” approach, are they an effective way to get the diversification and growth you need for retirement?

 

In this episode, Liz breaks down the findings of a recent study titled The Unintended Consequences of Investing for the Long Run: Evidence from Target Date Funds.  She’ll guide us through the history of target date funds, explore whether they underperform or outperform, and weigh the pros and cons of using them. If you have any questions or need personalized advice, feel free to reach out to Liz at Best Path Advisors!

 

Here’s some of what we discuss in today’s show:

 

  • What is a target date fund and why do we have so many?
  • What does research show about target date funds?
  • Some pros and cons of target date funds
  • How do target date funds fit into retirement strategies?

 

Resources for this episode:

The Unintended Consequences of Investing for the Long Run: Evidence from Target Date Funds