The 401k QDIA Default Investment That May Not Fit You

In this episode of The 401k Podcast, Lucas and Luna dig into the Qualified Default Investment Alternative, or QDIA — the default fund your 401k plan automatically invests you in if you don't make an active election. Most QDIAs are target-date funds, but not all target-date funds are created equal. Lucas explains how different plan sponsors choose different glide paths, and why a 35-year-old employee at one company could be in a much more aggressive target-date fund than a peer at another firm — even with the same target retirement year. Luna pushes back on whether investors even know what QDIA they're in. They discuss the 1994 book 'The Winner's Curse' by economist Richard Thaler as an analogy for why passive defaults can leave some participants overpaying or under-diversifying. The hosts also cover how QDIAs shifted after the Pension Protection Act of 2006, and what you can do if your default fund isn't aligned with your personal risk tolerance. A practical episode for anyone who has never rebalanced their 401k. #401k #QDIA #TargetDateFund #DefaultInvestment #PensionProtectionAct #RichardThaler #WinnersCurse #GlidePath #RetirementPlanning #PassiveInvesting #EmployeeBenefits #FiduciaryDuty #PlanSponsor #RiskTolerance #AssetAllocation #Finance #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo