2 Problems With Target Date Retirement Funds
Target date funds can be a great hands-off option for many investors who simply don't have the time to manage their retirement portfolios. All you have to do is select a year around when you expect to retire, and the fund manager will worry about asset allocation. As you get older, the portfolio will shift more assets from stocks to bonds, theoretically leading to a less volatile portfolio.
Target date funds can do a great job of managing a portfolio and ensuring the risk profile is appropriate leading up to retirement. But once you're in retirement, they can fall short by allocating far too much of the portfolio to bonds.
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Source Fool.com
