Workplace retirement savings plans, such as the 401(k) , have made a number of improvements over the years to get workers to a better financial position. Things like automatic enrollment and the option for automatic periodic contribution increases have been immensely helpful in getting people to save more money and accumulate wealth for longer than they would have in the past. The use of target-da...
Workplace retirement savings plans, such as the 401(k) , have made a number of improvements over the years to get workers to a better financial position. Things like automatic enrollment and the option for automatic periodic contribution increases have been immensely helpful in getting people to save more money and accumulate wealth for longer than they would have in the past. The use of target-date funds , which put people in an age-appropriate asset allocation that automatically adjusts over time to be more conservative as the person gets older, has been another improvement. This one, however, has its problems. Putting some workers in an investment based only on their age ignores personal risk tolerances, preferences, or objectives. The funds are a good thing, but not a great thing. And they are something that can cost you thousands of dollars or more if the ones you get put in are not the right fit for you. Continue reading