Why is picking investments in your retirement savings plan so hard? Maybe it's because the challenge keeps changing. When we're young, we're risk takers – or at least we can be when we have years ahead of us to smooth out the typical ups and downs of the equity markets. But when we get older and we can actually imagine ourselves reaching retirement one day, we need to rein in the risk and start protecting our savings.
But how do we know when to rein in the risk? That's what target date funds seek to do automatically. They offer an appropriate mix of equities and fixed income no matter where you are on your life path from the start of your career until well into your retirement years – whether you're ready to retire, in mid-career or even if you're too young to imagine what retirement might be like. Target date funds can make retirement investing easier. Talk to your financial advisor or employer today about how you can incorporate target date funds into your retirement savings plan.