It is a well-known fact that I don\u2019t like Target Date Funds (TDFs). It springs from the market meltdown in 2008-2009 when it was realized that during a bear market, certain 2015-2020 funds had a huge exposure to equity.<\/p>\n\n\n\n
Plus there was no equity exposure consistency between different fund family\u2019s TDFs, even if they had the same year on the fund title. Another reason I hate TDFs is because of the glide path, people live a lot longer these days than their retirement date.<\/p>\n\n\n\n
The whole idea behind TDFs is that it is a one-stop shop investment. It\u2019s supposed to be for participants who get confused about asset allocation or as the qualified default investment. Yet a recent John Hancock study shows that 25% of all 401(k) investors invest in other funds besides their TDF investment. That a lot of people doing things wrong and defeats the whole purpose of a TDF.<\/p>\n\n\n\n
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