A target date fund is a fund of funds that allows you to link your investment portfolio to your expected retirement date. Issues like withdrawal rate, savings rate and risk tolerance are based on averages, reducing your exposure to risky assets, mainly stocks, as you age, according to FiLife.
A lot of people think that all target date funds guarantee retirement, like Social Security. But that’s not always true. Therefore, it's in your best interest to be an investigator and do your research.
Also because target fund are funds of funds, you may be paying a fee to the target date fund, and then paying another fee to the funds inside that fund. It can be a mess, not to mention a tongue twister.
Read more at FiLife, by clicking here.
