#069: Is A Target Date Fund Right For You?
Big Picture Retirement®
Devin Carroll
4.7 • 546 Ratings
🗓️ 23 April 2018
⏱️ 25 minutes
🧾️ Download transcript
Summary
Managing your retirement savings can require a lot of knowledge and decisions. Lots of folks don't want to worry about which funds to be invested in, and what asset allocation is best for them. If that sounds like you, a target date fund might be right for you.
Each fund is identified with a year, and generally you would be picking a fund that corresponds to the date when you plan to retire. They're very popular because they are easy. You can just put your money in one fund, and you're done.
The way the investments are made in the account, the closer you are to the target date, the more conservative the investments become. The further you are from the target date, the more aggressive the investments will be.
If you are considering a target date fund, there are a couple of things to figure out. For more information, visit the show notes at http://www.bigpictureretirement.net/069
Transcript
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| 0:00.0 | The Big Picture Retirement Show does not provide specific tax, legal, or financial advice. |
| 0:05.1 | Listeners are encouraged to seek out their own advisors in these areas. |
| 0:12.9 | Hello everyone and welcome to the Big Picture Retirement Show where we deliver insight on what you need to know for a meaningful and successful retirement. |
| 0:22.3 | If you are planning for or living in retirement, this is the show for you. I'm Devin and John Ross is back with me again today. |
| 0:28.7 | Hey, John. Howdy. |
| 0:33.2 | So, John, what year do you think you will retire? I'm shooting for having the ability by 55. |
| 0:41.7 | Okay. 2000, 55? By age 55. Oh, age 55. And those two are not the same figure. Those are not the same figure. |
| 0:48.9 | They are not. Right. That would be approximately 10 years from today. Gotcha. Yeah. So there, most likely, is a fund that is made just for you. |
| 1:01.2 | And it's these target date funds that are out there. |
| 1:04.7 | These set it and forget it. |
| 1:06.9 | One stop shop, you drop your money in, and they're done. |
| 1:11.5 | And these have become very, very popular in retirement accounts. |
| 1:16.0 | When people don't really want to select their individual funds and individual asset allocations |
| 1:22.0 | and make sure they have enough in bonds and equities and international, small-cap, mid-cap cap, large cap, they can just put it in this |
| 1:29.1 | one fine and it's done. Well, and at my firm, we have a company 401k, and we recently switched |
| 1:39.0 | administrators. So we have a new administrator, a switch from our old to a new. And of course, they bring their people in to visit with all the employees. |
| 1:49.0 | And that was their big thing this year was, you know what, it's going to be real easy on everybody |
| 1:54.0 | because all they really have to do is not even really pick a date, but they would just kind of look at their age and |
| 2:03.1 | be able to say, for you, this target date would be appropriate. |
| 2:08.0 | And for you, this target date would be appropriate. |
| 2:10.8 | And if you don't want to try to pick out all of these different funds and stuff, all |
| 2:14.9 | you really need to do is just say, I'll take that date and we'll do |
... |
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