Target Date Funds

Have you ever been in a situation where there’s been so many choices that you just couldn’t make a decision?

I’ve talked to 401k participants who have been in this same situation when it comes to picking and choosing their 401k or 403b investments.

Today I want to talk about taking the guess work out of picking and choosing your investments.

But first, let me ask you a question. The question is, how do you as a 401k or 403b participant become a 401k superhero to your future self?

That is the question, and these videos will give you the answers. Hey, I’m Jonathon Schultheiss and welcome to the Becoming a 401k Superhero videos.

How do we make investments simple?

Here’s the thing, in a retirement plan we typically find two types of investors. There is the "do it myself" investor and the "do it for me" investor.

The "do it myself" investor is probably that person who has some market knowledge or understanding, and is good with picking their own investments.

But what if you are that "do it for me" investor? We have a solution for you too.

That’s where target date funds come in.

They are designed for the "do it for me" investor.

You’ll probably notice that in most retirement plans there are a series of investments that all have a date in the name of the fund.

These dates represent the target date, hence the name Target Date Funds.

The concept here is very simple. You pick the date that is closest to the date you plan to retire.

For example, if you plan to retire in 20 years, and today is 2021, then you would pick the 2040 target date fund.

This fund is designed to change over time as you get closer to the target date.

For instance, if you have 20 years until you retire, the fund may be slightly more aggressive. Then as you get closer to retirement, the fund would change to become more conservative each year as you get closer to that target date.

This is a basic principle of investing. The more time you have before you need the investments, the risk you can take. The less time you have before you need the investments, the less risk you want to take.

And Target Date Funds do all of this for you and take the guess work out of picking and choosing your investment.

So you don’t get overwhelmed by the choices and not make a decision. Now you can you focus on how much you should be saving.

When you don’t let choices overwhelm you and you stay focused on saving more for retirement, you are truly becoming a 401k Superhero to your future self.

If you want to talk about your investments or your savings, then click on the link above and lets you and I have a conversation about your situation today.