Don’t put words in my mouth. I never said they were bad. Since my first post on this topic I have stated that they are too simple and a cookie cutter fund for your retirement money. Some people might be ok with that now but in hindsight I’m sure many wish they would’ve done more throughout their career to grow their nest egg.

Sure, it’s easily better than doing nothing and “they’re not going to hurt anybody” but damn what a high bar you’re setting for yourself when this is your retirement money that you’re going to have to live on.

The entire name “Taget Retirement Fund” creates a false sense of security. Basically - if you’re putting your money in there then you’re all set for retirement. Sorry but it’s not the end-all-be-all, as convenient as it may be.
I’d bet there are millions of people that have no idea what their tgt retirement fund is even invested in. I’m not even talking about the stocks in the mutual funds, I’m talking about the underlying funds in the tgt retirement fund. That, in my opinion, is a problem and is just plain lazy.

Sure they are a good way to get started and if you’re in a time crunch situation where you need to pick a fund(s) in your 401k/IRA and you don’t know jack shite about any of the funds then go with a tgt retirement fund, but after that maybe educate yourself a little more and learn what’s more appropriate for you.
You may want to be more aggressive or more conservative than what the fund indicates - they’re solely basing your risk tolerance on your age.
Or you may want to be more diverse, especially as your assets grow and you don’t want to have all of your money allocated in just 4 extremely broad funds.

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Posted by GoCrazyAuburn

Member since Feb 2010

34954 posts

Posted on 7/19/18 at 11:07 am to tigerfan337

quote:
I answered your question explaining why I don’t think the 2045 - 2065 funds should be almost identical to each other.

You've yet to answer why 2045 and 2065 shouldn't both be 90/10 right now. Unless you and I just have a completely different opinion on what asset allocation means.

quote:
Don’t put words in my mouth. I never said they were bad

My apologies, I took you calling them too simplistic and lackadaisical as being condemnations of them.

quote:
Sure, it’s easily better than doing nothing and “they’re not going to hurt anybody” but damn what a high bar you’re setting for yourself when this is your retirement money that you’re going to have to live on.

The entire name “Taget Retirement Fund” creates a false sense of security. Basically - if you’re putting your money in there then you’re all set for retirement. Sorry but it’s not the end-all-be-all, as convenient as it may be.
I’d bet there are millions of people that have no idea what their tgt retirement fund is even invested in. I’m not even talking about the stocks in the mutual funds, I’m talking about the underlying funds in the tgt retirement fund. That, in my opinion, is a problem and is just plain lazy.

For someone that doesn't think they are bad, you're doing a lot of work showing why you think they are bad. You don't like that they are invested in just four index funds. I get it. That isn't an absurd split though. I mean there is an entire investing method based around a 3 fund portfolio. Yes you can do it your own and re-allocate on your own. 90% of the population doesn't know what the hell they are doing though. These funds are designed for that exact purpose.

Look, I get you think the are too simplistic for you personally. That is fine, but your criticisms of them are criticizing what they are designed to be. If that isn't for you, great.

quote:
I’d bet there are millions of people that have no idea what their tgt retirement fund is even invested in. I’m not even talking about the stocks in the mutual funds, I’m talking about the underlying funds in the tgt retirement fund. That, in my opinion, is a problem and is just plain lazy.

So, why wouldn't a target date fund be perfect for these people? You argue that these funds are cookie cutter and simple. Don't think anyone will disagree. Yet then go on about investors being lazy and not knowing everything they are investing in. How would that change if they were having to pick the funds themselves? How are these type of funds not perfect for an investor like that?

quote:
You may want to be more aggressive or more conservative than what the fund indicates - they’re solely basing your risk tolerance on your age. Or you may want to be more diverse, especially as your assets grow and you don’t want to have all of your money allocated in just 4 extremely broad funds.

Awesome. Nobody is forcing anyone to invest in these funds.

This post was edited on 7/19/18 at 11:12 am

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