Your Target Date Fund Has Lost at Least 14% This Year so Far, Unless…
Target date funds (TDFs) were last tested in 2008, when they failed to protect, losing more than 30%. 2022 could be the next test, and the indications are that TDFs will fail again, but this time there’s $3.5 trillion at stake, versus $200 billion in 2008.
Bottom line, most TDFs are taking too much risk at the target date, as shown in the following summary:
TDFs are invested 85% in risky assets at the target date – 50% in equities plus 35% in risky long-term bonds.
But there are safe target date funds. The Federal Thrift Savings Plan (TSP) and the OPEIU (Office Professional Union)?are examples.
Here’s how these two groups (Industry and Safe) have performed so far:
Beneficiaries who are near retirement are invested in the 2020 Fund that has lost 13.9% so far this year, unless you’ve been protected by the TSP or OPEIU, in which case you’ve lost only 4.3%.
2022 might be a repeat of 2020 with its V-shaped recovery, but many believe it’s the beginning of a crash that will be worse than 2008.
Those near retirement cannot afford to speculate. They need to move to safety now.
Baby Boomer thought leader- Author of "In Search of the Baby Boomer Generation," - Part of the leadership team at Today's Senior Magazine-- Co Founder of BabyBoomer.org
2 年Thank You to Ron Surz for helping so many #babyboomers with your platform- Age Sage Robo. If you are a #babyboomer looking for help-and assistance--I encourage you to Google-- "Age Sage Robo,"-- Rick Bava -- Today's Senior Magazine