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Good Questions For Target-Date (Lifecycle) Funds





Five really good questions to ask before you splash into the target-date funds.

From WSJ:

Also known as "life cycle" or "asset allocation" funds, they are "funds of funds": collections of stock funds, bond funds, international and even real-estate funds. Their uniqueness lies in that they regularly change the holdings (referred to as "rebalancing") to become more conservative over time, meaning they move more heavily into less-risky things like bonds as the target date nears.

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Individuals are faced with the quandary of how to pick a fund best suited to them. Here are some questions to ask:

How much risk can I stand?
How good are the funds?
What's the cost?
Can I really forget it?
Finally -- blissful retirement. Now what?

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