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Article: Life-Cycle Funds: Targets, Not Guarantees
- Article from:
- The Washington Post
- Article date:
- August 19, 2007
- Author:
CopyrightThis material is published under license from the Washington Post. All inquiries regarding rights should be directed to the Washington Post. (Hide copyright information)
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I have a deep and abiding suspicion of easy answers. That's why
the idea of life-cycle funds makes me uneasy.
Nonetheless, more and more retirement savings plans' participants
are likely to be offered these funds by their employers. And for
those who otherwise might have parked their retirement money in
lower-return investments or too much company stock, they probably
are an improvement.
But are they the best solution? For all their supposed benefits,
there are at least a few serious concerns.
Life-cycle funds are aimed at a year in which you might retire or
be close to retiring -- say, 2015 or 2030. They offer investors a
mix of higher-return choices such as stocks and lower-risk ...