Can target date funds actually be personalized when approaching retirement age? Robert "Bob" Powell sits down with Chris Littlefield, President of Retirement Income Solutions at Principal, to discuss how you can improve your retirement returns with a hybrid target date fund.
In the full episode of Decoding Retirement, Bob and Chris discuss adjusting your portfolio to match the moment, common retirement mistakes, and how to tell when it's the right time to retire.
Catch the full episode with Chris Littlefield on Yahoo Finance's Decoding Retirement. Yahoo Finance's Decoding Retirement is hosted by Robert Powell, and produced by Dennis Golin. Find more episodes of Decoding Retirement at http://goldberglawma.com/?id=videos/series/decoding-retirement. Thoughts? Questions? Fan mail? Email us at yfpodcasts@yahooinc.com.
This post was written by Dennis Golin.
The interesting thing you're seeing in target date now is you're also seeing what what people are calling hybrid target dates, right? Target date fund until you reach the age of 40 or 45 or 50, and then it converts to a managed account option. So, you have an asset allocate asset allocate asset accumulation for 20, 25 years, but then when you get starting closer when you might need to start planning for retirement, it gets you into more personalized that takes into account your individual circumstance as opposed to just your age. And I think that's been a really uh significant uh uh approach. Now there is a cost difference to that. There is a cost for providing that advice, but in many cases we see the people that pair up a target date fund with the managed account have better overall retirement income outcomes because that managed account is able to be personalized for their specific and unique circumstances.
Yeah, if I think about one of the historic sort of short corners shortcomings of plan providers is this notion of that you have eyes on someone's defined contribution or 401k plan, but maybe not on their other assets. Maybe maybe they have rental income from a an apartment that they own. Maybe they have a lot of um uh stock from the company that they work at, or maybe they have a lot of money in a taxable account, but so being able to have eyes on all their assets is really important as you think about building a plan that works for them.
