[Tyler]

Does it start changing to a more bond oriented fund the closer you get to retirement?

Thanks!

[David]

Yes, correct. I prefer the Index Target retirement funds with low fees. Regular target retirement funds have notoriously high fees. Example Fidelity Freedom Index vs Fidelity Freedom funds.

[Philip]

IF you use these funds, they should be the ONLY funds you use. Otherwise you are defeating the purpose by duplicating/eliminating some sectors and changing the allocation…

[Michael]

You got it… the design is to pick the one closest to your full retirement age, concentrate on your savings rate and let it work on autopilot. Pros- dead simple to do. Cons- it’s a “one size fits none” approach that isn’t optimized for your specific situation. Fees can be high, but most common 401k offerings are the lower cost index versions but check to be sure.

Related: 401k – Do I keep it in target retirement or go split it up into 25% in VTSAX, VFIAX, VTIAX, VTWAX?

[Author]

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