About half of workers invested in a 401(k) plan rely on target-date funds, and most plans now offer them. But is putting your investments on autopilot the best approach to retirement planning?
It depends on whom you ask.
If you're committed to saving and are knowledgeable about the market, it may be worth comparing these funds to the alternative: building your own portfolio with the offerings available through your company's particular plan.
"If you understand the stock market or you are going to get professional help, you can probably build a better portfolio with [an asset mix] that is more tailored to you if your plan offers good choices," said David Shotwell, a certified financial planner with Shotwell Rutter Baer. "Otherwise, use a target-date fund."