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The Failure of Target Date Funds
Jim Lauder in RIABiz Link to more items from this source
[Opinion]
July 31, 2013
"Most investors are uncomfortable with even a 10% loss near retirement, but in 2008, most 2010 target date funds lost much more than that -- even up to three times that. In 2008, the Morningstar target-date 2000-10 category average was down 22.46%.... However, it's wrong to say that a retirement plan provider on either end of that spectrum did a poor job or failed those participants.... Was the philosophy of taking above-average risk in an effort to mitigate longevity risk and lack of adequate retirement savings wrong? Not necessarily. Was that philosophy misunderstood by some fiduciaries and investors who experienced above-average 2008 losses? Absolutely."

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