The Hidden Risks in Your 401k- Season 8: Episode 7
March 8, 2022
In the world of investing, time can be one of your biggest allies. As your time span grows shorter, though, your risks tend to go up: if you need your money sooner rather than later, your stock investments could take a downturn at just the wrong time, leaving you without the funds you need.
A Target Date Fund in a 401k is designed to deal with this time-related risk. As you get closer to retirement, and thus closer to needing your funds, the investments are supposed to become more conservative overall, less volatile, with the goal of preserving your principal.
But it doesn’t always work out this way.