Target Date Funds Explained: How They Work and Who They Fit

A target date fund is a single investment that holds a mix of stocks and bonds and automatically adjusts that mix as you get closer to a specific retirement year. In this episode, Ryan explains the glide path concept: the fund starts aggressive when retirement is decades away and gradually becomes more conservative as the target date approaches, then often continues managing the allocation even after you retire.He also breaks down who benefits most from these funds (hands-off investors who want a simple, set-it-and-forget-it option) and the main limitation (the fund only optimizes for one variable, your retirement date, without knowing anything else about your situation). If you have a target date fund in your 401(k) and are not sure what you are actually invested in, this episode gives you a clear framework to evaluate it.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!