2/16/2015 – Changes coming to Target Date Funds (USA Today)

The more things change in the world of employer-sponsored retirement plans, the less they remain the same. And that’s especially so when it comes to one of the most popular investment options in many 401(k) plans – the target-date mutual fund. Why are plan sponsors dumping their record keeper’s proprietary target-date funds and replacing them with custom target-date funds and, more important, what might you consider if you’re investing or given the chance to invest in a custom target-date fund in your workplace retirement plan?A target-date fund is a fund of funds which over time reduces the percent invested in stocks as the fund nears the date in the fund’s name, a date that would typically correspond to the investor’s planned retirement date. How funds reduce the percent invested in stocks vs. bonds is called the fund’s glide path.

Read the full article at USA Today.