The Product Guru: The Skinny on Target Date Fund Reform – Financial Planning

 via The Product Guru: The Skinny on Target Date Fund Reform – Financial Planning.

The Product Guru: The Skinny on Target Date Fund Reform  Financial Planning for Women and Men; Retirement Planning for Women and Men

Commentary by: Jane Nowak, Financial Planner for Women- MoneyGal2020

This article explains my concerns about ‘target date’ mutual funds. Target Date 2010 funds, lost about 23% in 2008, they were no fun during the market meltdown. In fact, in 2008 many of these funds were 50% in stocks and 50% in bonds with many owners within 2 years of retirement…As explained in the article, there was a logical reason for maintaining that asset allocation in a 2010 target date fund. Unfortunately, many investors had no idea or understanding of the reasoning behind holding a 50/50 investment split in their target date fund. So, they stayed invested in the 2010 Target Fund and rode their retirement savings part way down with the market.

Yes, hindsight is always 20/20. However, because many investors’ wealth is entirely/almost entirely held in retirement accounts, the 23% loss in value represented several years of retirement savings lost to the market plunge. This was devastating for many folks who thought they would be retiring this year! We are responsible for doing our own due diligence on the investments that we purchase or for hiring someone to keep to do the due diligence for us.

Always read fund information, monitor your fund’s performance and caveat emptor!

 Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Follow Jane on Twitter at:




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