Millions of 401(k) investors believe they’ve found the perfect mutual fund solution.
The most popular “set-it-and-forget-it” 401(k) investment management strategy.
Target-date 401(k) mutual funds.
They look simple enough.
They provide information that reads like a safe alternative.
They promise auto-pilot investing.
But the truth is target-date mutual funds are sneaky and deceptive.
Not the single-decision 401(k) mutual fund solution they claim to be.
In fact, they may be the most dangerous choice in your 401(k).
Why 401(k) Target-Date Funds Fail You:
• They hold stocks that don’t adapt to stock market risk levels.
• They own confusing combinations of growth, value, large, mid, and small stocks.
• They often carry higher expenses than plain index funds.
• They are advertised as simple, but are hugely complex investments.
Instead of falling into the target-date trap.
Know that you own in your 401(k) mutual funds.
Know the annual expenses and investment performance of your mutual funds.
Know how much stock market risk you are willing to take in your 401(k).
Independent, fiduciary-level ranking of your plan’s 401(k) mutual funds.
The best place to begin your 401(k) mutual fund analysis.
In my 42 years providing individual 401(k) investment advice.
Here’s where you will likely end your mutual fund analysis.
A plain vanilla S&P 500 index fund.
Low-cost, transparent, and one of the best-performing parts of the U.S. stock market.
The only thing worse than owning a 401(k) target-date fund today.
Is continuing to funnel every paycheck into a similar mutual fund tomorrow.
Curious about what’s inside your 401(k) target-date fund?
Share your 401(k) target-date fund with me.
I’ll provide a clear, independent analysis of exactly what you own.
P.S. Get off auto pilot and take back control of your 401(k).
