Target Date Funds as QDIA

[SFSD]

Hope you can help a debate we are having . . . .

As a participant ages and would fall into different target date funds, does all of his money move into the current appropriate fund?

Or does the "old" money stay where it is and only the "new" money goes into the "updated fund?"

It would make sense that all of a participant's money would be in the same current appropriate fund based on age.

Even if the target date fund is elected rather than a default, would the funds move based on attained age?

Thanks!

[Lou S.]

I'm confused. If you use a target date fund, you usually use the whole suite of funds not just one fund.

Someone who reaches NRA in 2040 would be defaulted to the XYZ 2040 TDA

Someone who reached NRA in 2055 would be defaulted to the XYZ 2055 TDA

etc.

You just need a rounding method for folks who land in between the band.

[Bird]

The target date stays the same as a person ages - if s/he has a target date of 2035 now, s/he'll still have a target date of 2035 in 2020.

[SFSD]

Lou -

You are right. The target date funds are a series of funds based on retirement age.

Bird -

What was I thinking?!?!? I totally agree. If a person will be age 65 say in 2040, that's not going to change. Maybe it was too late in the day? Too much year end stress?

Thanks to both of you!