What Are You Cooking Up For Retirement?
Do you enjoy cooking up a feast – perhaps, seared scallops in a bed of summer succotash? Or do you prefer the convenience of takeout? There are pros and cons of each. Clearly, takeout is easier. But a restaurant can’t account for your specific needs. They don’t know about your fierce hatred of parsley. Or that cross-contamination of gluten will cause your celiacs to flare up.
Think of Target Date Funds as the “takeout” of retirement planning. Target date funds are designed to help make saving easier. Depending on the investor's anticipated retirement date, the fund's asset allocation begins with a mix of growth and income-oriented investments and gradually becomes more conservative - more heavily weighted toward lower-risk investments - as the investor approaches retirement. In fact, if you have a 401K Plan, you might already be invested in a target date fund because it’s often considered the “default investment”.
Sounds simple, right? Like ordering Postmates. But there are some downsides. For one, it can be more expensive. Make sure to check out the expense ratio of your target date fund. The average fund has an expense ratio of .51% -- that’s compared to index funds, which could be less. They also may be too conservative for your retirement planning. Or too risky! Target Date funds are formulaic – one size fits all. They don’t take into account your broader portfolio. Like a restaurant, they’re cooking up the same meal for every customer.
Do you have the knowledge and resources to manage an investment portfolio yourself, or would you prefer that a professional do it for you? If you prefer healthy home-cooking without the extra work, consider contacting Centrix Wealth Partners. We’ll be happy to see how we might be able to help you cook up a gourmet retirement plan.
Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Centrix Wealth Partners is not a registered broker/dealer and is independent of Raymond James Financial Services.
The information contained does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Centrix Wealth Partners and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results.
An investment in a target-date fund is not guaranteed, and you may experience losses, including losses near, at, or after the target date. There is no guarantee that the fund will provide adequate income at and through retirement. Consider the investment objectives, risks, charges, and expenses of the fund carefully before investing.
An index fund takes on the risk of the underlying index it tries to replicate and, as a result, if the index goes down in value, the fund can lose value. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary.
Target-date and index funds are sold by prospectus, which can be obtained from your financial professional or the company and which contains complete information, including investment objectives, risks, charges, and expenses. Investors should read the prospectus and consider this information carefully before investing or sending money.