Do you know what happens to Target Date Funds when the target date is reached?

As a retail investor, do you ever wonder what happens to a Target Date Fund when the “target date” is reached? Here is an article published by Morningstar that answers the question.

With the immense popularity of Target Date Funds, it is possible that you may be aware of, or perhaps even invested in, one of those.

If you have been following us, we discussed differences in glide paths earlier.

Beyond that, here are some other questions to consider as part of the due diligence as part of the allocation decision:

1) Do you know the underlying assets in which the fund is invested?

2) Do you know the risk/reward ratio for those underlining investments?

3) How would the answers to the above questions impact your decision to leave money in these funds, or invest them elsewhere, based on your liquidity needs during retirement?

Do you have additional questions that you could share with our readers?