Target Date Funds for the Thinking Person

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Depending on the type of portfolio held, investors—especially retirees—can be devastated by an unfavorable sequence of returns. While you can't control the market's performance, you can control the risk level of a portfolio when it is particularly sensitive to losses. Here's how.

Let the Propaganda Begin

A Marketwatch article, [[https://www.marketwatch.com/story/this-will-not-save-social-security-a1d62c01?mod=home-page This Will Not Save Social Security]], tries to make the point that raising the tax cap will not save Social Security. It reads like an effort to manipulate public opinion.

As discussions ensue about the best way to bring the Social Security system into actuarial balance, the raising of the maximum wage base is emerging as a popular solution. In 2024 wages up to $168,600 are subject to the 12.4% Social Security tax, with the employee and employer each paying half and self-employed individuals paying the full 12.4%. Wages over $168,600 are not taxed and are not counted as earnings for the benefit formula.

First ‘To and Through’ TDF Defends Against Sequence-of-Return Risk

Sequence-of-return risk is highest as we transition from working life to retirement. Lifestyles can be devastated, even if markets recover. A new TDF fund is designed specifically to defend against this kind of disaster.

How Safe Is Client Money in a Target-Date Fund?

Target-date funds continue to grow in popularity, and are now the most popular investment in 401(k) defined contribution pension plans. Yet this advisor argues they are not the safe bet investors may assume, and our current rules do not adequately protect beneficiaries invested in them.