Being Too Hands-Off Can Chip Away at Your Retirement Savings
When you're setting up your investment choices in your 401(k), you're generally given three main options: your employer's stock (if it's a public company), funds put together by market cap, and target-date funds. Target-date funds are investments that cater to your projected retirement year. As you get closer to the target date, the fund automatically tweaks its holdings to become more conservative.
Target-date funds have grown a lot in popularity over the past few years. In 2021, the total amount invested in target-date funds hit a record $3.27 trillion (up 20% from 2020), according to Morningstar's Target-Date Strategy Landscape Report. Target-date funds can be a good option for investors looking to be hands-off with their portfolio, but they do come with a price.
Source Fool.com
