Tool Navigates Sea of Target-Date Funds

Wide Range of Similar Products Can Make Advisers, Investors Dizzy


By John Morgan

September 15, 2008

Target-date funds, also known as lifecycle funds, are rapidly rising in 401(k) plans as the favorite qualified default investment alternative because they're much more appropriate than the traditional money market fund for hands-off investors. In theory, you simply pick the target date that's closest to when you expect to retire, and you're done. The fund rebalances your asset allocation over time, growing more conservative as you grow older. If only it were that simple.

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