Target Date Investment Funds: Good, Bad, Or Just Misunderstood?
Broken Pie Chart
English - December 16, 2018 22:10 - 20 minutes - 18.9 MB - ★★★★★ - 16 ratingsInvesting Business Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
Previous Episode: What are Risk Adjusted Investment Returns?
Welcome to the Broken Pie Chart Podcast Episode 15. In this episode Derek Moore discusses the often-misunderstood target date funds prevalent in many workers 401k accounts and whether they are a good or bad idea especially given their drawdowns during the 2008 financial crisis.
Key Takeaways:
• What are target date funds? • How did target date funds do during the 2008 market? • What was performance so different between some target date funds during financial crisis? • What is the purpose of target date funds in retirement accounts? • How target date funds are really just age-based asset allocations adjusted as a person ages. • What are the drawbacks of target dated funds? • Why are target date funds so misunderstood? • How do target date funds compare with college saving accounts and 529 plans? • How target date funds do not take into account outside assets when making allocations • Understand why target date funds may not allow for more personalized advice • Did Congress really hold hearings about target date funds post the Great Recession? • What is the target date glide path and asset allocation adjustment schedule? • Target Date funds do not have embedded downside protection • What are alternatives to target date funds? • What was the target date surprise?
Mentioned in this Episode:
Broken Pie Chart Book by Derek Moore https://amzn.to/2MibTSk
Report From Committee on Aging Congressional on Target Date Funds
https://www.govinfo.gov/content/pkg/CPRT-111SPRT53067/html/CPRT-111SPRT53067.htm