https://money.usnews.com/investing/slideshows/7-tips-for-finding-the-best-target-date-retirement-funds-to-buy?src=usn_invested_nl 7 Tips for Finding Target-Date Retirement Funds
March 11, 2019
One in three Americans have nothing – zilch – saved for retirement. That's not OK. If you're financially able, you need to start saving, today. A retirement nest egg is vital for a full, happy, and healthy life.
Once you start saving, choosing where to invest your money is another hassle. Thankfully, retirement funds have made this much easier for investors, and target-date retirement funds, which adjust their holdings as you age to suit your changing risk profile, are even easier. Contrary to public perception, figuring out how to invest responsibly isn't rocket science.
Here are seven tips to finding the best target-date retirement funds for you.
1. Figure out your timeline. This is generally the easiest and most crucial variable to consider when narrowing down what kind of target-date funds will work for you. Most target-date funds contain a year in their name, which corresponds to the year you expect to retire. If you're 45 and expect to retire at 65, pick a target-date fund roughly 20 years out. They're often organized into five-year increments, so in this case you might consider a 2040 target-date retirement fund. There are also target-date funds designed for those currently in retirement.
2. Figure out your risk tolerance. Remember, target-date funds are designed to be full portfolios, so if you have other investments, consider how those might affect the total risk you're taking. For example, if you already have a good chunk of money in the stock market, you might want to lean more conservative than you otherwise would, choosing funds with less equity exposure, or funds that move to lower-risk investments more quickly than others. – John DIvine
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