As Target Date Funds (TDFs) become more prominent in the retirement plan landscape, anyone who has a balance in 401(k) savings plans would be well served to understand a few basic features of how these funds operate.
As the ReutersMoney article reports there are many variations in how different Target Date Funds operate.
Test your knowledge of TDFs as an account holder in such plans so you can determine whether they are right for you:
1) Do you know how they change the asset allocation of their holdings over time – also known as the “Glidepath”?
2) Do you know whether this Glidepath is applicable up to the target-date or through the entire duration of your retirement?
3) Do you know whether the fees being charged are appropriate relative to other similar funds?
As a DC plan participant, what role do Target Date Funds have in your retirement income strategy?