Are TDFs (Target Date Funds) right for you? While they’re marketed as convenient, “set it and forget it” solutions, certified retirement counselor Mark Struthers explains why these popular investment tools may not work for everyone—especially retirees.
Many retirees (notably baby boomers) equate the “target date” with a pension-like guarantee, only to be blindsided by volatility and inflexible investment structures when it matters most. Don’t let this happen to you—listen to this episode to learn the limitations of TDFs, how they can fall short, and other options that can help you plan for a more secure retirement.
What You’ll Learn:
- What Target Date Funds (TDFs) are and why they were created.
- Why one-size-fits-all allocations can be problematic.
- How TDFs limit flexibility in withdrawals and asset allocation.
- The risks of overly conservative allocations in your 50s and 60s.
- The dangers of ignoring market conditions and locking in losses.
- TDFs and their shortcomings in tax and estate planning.
- When TDFs can work.
Ideas Worth Sharing:
- “Your risk is changing in retirement. Your assets have to change too.” – Mark Struthers
- “One-size-fits-all allocation may not suit your needs… TDFs follow a generic glide path… and it may be too conservative or too aggressive.” – Mark Struthers
- “What are the advantages [of TDFs]? BTN, better than nothing. It’s a simple, offhand approach. It’s why you have auto-enrollment at 401(k)s. You have these as default funds. We want something that can at least have a shot at growing their assets for retirement.” – Mark Struthers
Resources:
- Work with Mark Struthers
- Subscribe to our Healthy & Wealthy newsletter and get our 2025 Tax Cheat Sheet: Subscribe here
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Disclosure:
Investment advisory services are offered through Sona Financial LLC (DBA Sona Wealth Advisors, Sona Wealth, Sona Wealth Management), an investment adviser registered in the state of MN. Sona Financial only offers investment advisory services where it is appropriately registered or exempt from registration and only after clients have entered into an investment advisory agreement confirming the terms of engagement and have been provided a copy of the firm’s ADV Part 2A brochure and document.
This video or article is for educational purposes only and is not exhaustive. Nothing discussed during this show/episode should be viewed as investment advice. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but is intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax, or financial advice. Please consult a legal, tax, or financial professional for information specific to your individual situation.
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