One investment bright spot: target-date funds[SIZE=-1]Target-date funds, the kind that invest your money according to the year you plan to retire, are rising in popularity and likely to grow even more in the years ahead, according to a new study by the Employee Benefit Research Institute.
That?s due, in large part, to the 2006 pension act, which allowed employers to automatically enroll new workers in their 401(k) plans and made target-date funds one of the default options.
All in all, this is probably a good thing: more workers saving for retirement and more of them investing in funds with some exposure to the stock market, which in normal circumstances (remember those?) is the best bet for staying ahead of inflation.
The Consumer Reports Money Lab analyzed target-date funds offered by three big investment companies (Fidelity, T. Rowe Price, and Vanguard) last fall, finding that they differed in investment strategy but delivered relatively similar performance.
For what it's worth, my own 401(k) is in a target-date fund, although,given the current economy, I should probably switch to one with atarget of 2317 or so.
?Greg Daugherty
Greg writes the ?Retirement Guy? column each month in the Consumer Reports Money Adviser* newsletter.
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