Kerry Hannon at Yahoo Finance looked at target-date funds, which hit a record $4.8 trillion in assets in 2025, and asked whether they are still right for people approaching retirement. I gave her both sides.
First, the case for them. Target-date funds solve a real problem. Most people never rebalance, never check their allocation, and would be far worse off doing nothing. For that saver, a single, well-run fund beats a neglected 401(k) every time.
Second, where they fall short. The glide path is set to a calendar date, not to a person's actual balance, spending needs or other assets. Someone with a pension, a paid-off house and a healthy taxable account gets de-risked at the same pace as someone with nothing else to fall back on. That is the mismatch. A saver who goes heavily conservative at 65 may be locking in lower returns for a retirement that is nowhere near over, at a time when inflation, healthcare costs and longer lifespans argue for keeping some growth in the mix.
My takeaway for readers: a target-date fund is a good default during the accumulation years. In the five to ten years before retirement, the allocation deserves a real look against your full picture, not just your birth year.
Read the full article at Yahoo Finance →
