Today on the Finance Flash Go! podcast, we’re going to discuss target date retirement funds.

Target date funds are funds offered by many brokerages in which they base the asset allocation on the estimated year that you plan to retire.

The funds are generally composed of index funds in select stock/bond allocations that decrease in risk as you approach your targeted retirement year. The asset rebalancing is performed automatically by the fund without you needing to actively do anything.

The disadvantage of target date funds are that their expense ratio is typically a bit higher than just doing the work yourself. However, the increase in fees is not typically large.

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