How target-date funds can fall short

01/22/2013 | Wall Street Journal, The

Investors are flocking to target-date funds, but some experts warn that the funds' annual returns are lower than many people will need for building up sufficient retirement savings. Over the past five years, the average fund with 2015 as the target date grew just 2% a year, while standard planning models are based on 6% returns. Possible solutions, experts say, include choosing a fund with a later date and directing new 401(k) contributions into higher-risk investments.

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Wall Street Journal, The

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