Target Date Funds: Preparing Participants for Retirement

December 19, 2018 | Julianna Paterra, CFA, CAIA, Research Analyst

A pitfall for a majority of plan participants surrounding retirement planning is a lack of familiarity with investing. Participants with little to no investment experience are expected to make allocation decisions that will greatly impact their retirement. Target date funds serve as a one-stop shop for a diversified and risk-appropriate portfolio which automatically de-risks as the participant ages. These funds are managed to a specific target retirement date; when an investor chooses his or her retirement year, the portfolio is put on “autopilot” as the fund is managed and rebalanced with risk and return characteristics appropriate for that defined investment horizon. While these funds fulfill a need for simplicity in the marketplace, there are many nuances with which plan sponsors should be educated in order to make a decision that is best for their participant pools.

This paper serves as an educational tool for plan sponsors to aid in the selection and continuing evaluation of target date funds. Topics including purpose, construction, goals, and benchmarking will be discussed.

Download PDF >

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Julianna Paterra, CFA, CAIA
Research Analyst

Get to Know Julianna

Related Content

01.18.2019

2019 Market Preview

Coming off a difficult 2018, investors face a litany of questions going into this year, whose potential answers will undoubtedly…

12.28.2018

2019 Market Preview Briefing

Live Webinar – Thursday, January 17, 2019 – 1:00-2:00 PM CT

12.21.2018

Keeping the Current Market Correction in Perspective

Over the last few months, equity markets have experienced sizable drops, making many investors wary about the future. Despite this,…

12.14.2018

Rebalancing Position Paper

Regularly rebalancing portfolios is one of the key duties of trustees and other fiduciaries responsible for managing…

11.05.2018

2018 Investment Symposium Briefing

Recorded Friday, September 28, 2018 — 2018 Investment Symposium  

11.05.2018

Luncheon Keynote with Richard H. Thaler

Recorded Friday September 28, 2018 — 2018 Investment Symposium

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >