"Common sense will tell you just picking a year to retire should not be the basis for constructing an investment portfolio. The most important information you need to know about a plan participant is their risk tolerance, not which year they plan to retire. As a financial advisor and 401k plan consultant, it is my ethical and legal obligation to know a clients risk tolerance before ever recommending an investment. Target funds assume everyone's tolerance for risk is the same. This makes it easy from an administrative viewpoint but are you doing a good job for your 401k participants? Even more importantly, are you making the right ethical decision in offering an investment to your participants which ignores their individual risk tolerance?"