TITLE

Target-Date Funds: A Temporary Solution to a Permanent Problem

AUTHOR(S)
Blanchett, David M.
PUB. DATE
September 2011
SOURCE
Journal of Financial Planning;Sep2011, Vol. 24 Issue 9, p60
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The widespread acceptance of target-date portfolios has improved participant investing. More participants are deciding to let investment professionals manage their accounts and will likely achieve higher returns and less risk as a result. Unfortunately, target-date portfolios. in particular target-date funds, are widely misused and are not properly understood by 401(k) plan participants. Because of this, target-date funds are likely only a temporary solution to the permanent problem of 401(k) plan participant self-direction. This paper will introduce an automatic managed account solution designed to be a permanent asset allocation solution for 401(k) plan participants. Initial evidence suggests professionally managed portfolios designed in a way to maximize participant use have advice-acceptance rates of more than 80 percent and dramatically improve the probability of 401(k) plan participants accumulating enough assets to fund retirement income.
ACCESSION #
65761544

 

Related Articles

  • Making Your Savings Last. Sivy, Michael // Money;May2003, Vol. 32 Issue 5, p50A 

    A member of my family recently asked me for financial advice. The specifics of his situation are unique, but the basic problem is fairly common: how to invest limited retirement savings and make the money last. Although my relative earned a hefty income at some points during his life, he never...

  • Can We Talk? Gallant, Dennis; Schneider, Howard // Research;Apr2009, Vol. 32 Issue 4, p28 

    The article discusses the retirement income planning process. It includes the importance of the discovery process such as qualification, initial consultation and orientation as well as data collection. It notes that advisors need to uncover issues that clients may be unable to readily...

  • Rates of Return Used in Retirement Planning Software. Turner, John A. // Benefits Quarterly;2012 Fourth Quarter, Vol. 28 Issue 4, p33 

    There appears to be a bias in some retirement planning programs to use rates of return that are too high. For example, some programs do not take into account fees, and many programs do not take into account the evidence from behavioral economics that individual investors tend to do worse than...

  • Another Way to Invest for It. Sivy, Michael // Money;Nov2005, Vol. 34 Issue 11, p117 

    Offers an investing strategy for retirement. Observation that, for some retirement investors, stocks, not mutual funds, should be the assets of choice; Examples of times when it is better to use individual stocks and bonds than mutual funds; Drawbacks of relying on mutual funds; How selecting...

  • How good is gold? McCormick, Dominic // Money Management;7/15/2010, Vol. 24 Issue 25, p22 

    The article looks at the potential of gold to be invested as an asset for financial strategy. It outlines how consumer confidence in the financial system affects the return on investments, and the invesment assets such as commodities, managed futures and volatility focused hedge funds that are...

  • Avoid Retirement Regrets.  // Practical Accountant;Jan2007 Supplement, Vol. 40, p5 

    The article reports on the tips and guidelines concerning retirement planning in the U.S. According to a survey conducted, late financial planning contributes to financial regrets experienced by most Americans. Vice President Monica Kirgen of Retirement and Investors Services stated that its...

  • Big Apple Retirement Makes Move on TIPS. Forde, Arnella J. // Investment Management Weekly;12/15/2003, Vol. 16 Issue 49, p1 

    Reports on the request for proposals issued by the retirement plans within the New York City Retirement System for managers to oversee the allocations to Treasury Inflation-Protected Securities (TIPS). Basis of the system for selecting TIPS investment; Statement from system spokeswoman Nicole...

  • A class act. Murphy, Patrick // Money Marketing;12/9/2004, p44 

    The article reports that the foundation of modern portfolio theory was a 1952 paper, "Portfolio Selection," in which the author Harry Markowitz established a theory explaining the best way for an investor to choose a portfolio. His basic theory was that investors should choose a portfolio that...

  • When Target Funds Miss Their Mark. Wang, Penelope; Fitch, Asa // Money;May2007, Vol. 36 Issue 5, p53 

    The article discusses target retirement funds. They are all-in-one portfolios of stock and bond funds. They are designed to diversify investments, automatically balance portfolios and shift to more conservative assets as consumers approach retirement age. Analysts warn the funds aren't right for...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics