Should I consider investing in Target Date Funds with later target dates?

I look at my retirement accounts every couple days even though I do not plan to touch them for several years. I have my current employer's 401(k) Plan that I receive a match on, a Roth IRA and a Traditional IRA. My Traditional IRA has holdings in a 2050 Target Date Fund. With people both living and working longer, should I look into investing in a Target Date Fund for 2055 or later? What are the benefits and possible risks involved with these funds?

Investing, Asset Allocation, Retirement Plans
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6 days ago

You bring up a great point.  If I use a target date fund (almost exclusively in 401k plans) I generally use the date which lines up with the clients needs and estimated retirement.  This is opposed to the typical "when will I be 65" choice.  Many target date funds end up with more bonds in the portfolio than I think would be appropriate for many peoples portfolio.

 

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DAVID RAE, CFP®, AIF® is a Los Angeles-based retirement planning specialist with DRM Wealth Management a Registered Investment Advisor. He has been helping the community reach their financial goals for over a decade. He is a regular contributor to the Advocate Magazine, Investopedia and Huffington Post as well as the author of the Financial Planner Los Angeles BlogFollow him on Facebook, or via his website www.davidraefp.com

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