Episode 1265
In this episode, we unpack the mechanics and history of Target Date Funds (TDFs), the "set it and forget it" investment solution now dominating retirement accounts. We explain the core concept of the "glidepath"—an automated strategy that shifts your portfolio from growth-focused equities to conservative bonds as you approach retirement age.
Join us as we discuss:
• The Origins: How TDFs were invented in the early 1990s and why their popularity skyrocketed after the Pension Protection Act of 2006 made them a standard default for 401(k) plans.
• The Psychology: How these funds leverage behavioral economics and "nudge theory" to help savers overcome the risk of making poor investment choices.
• The Risks & Trends: A look at the 2008 controversy regarding unexpected volatility in near-dated funds and the rising demand among millennials for socially responsible investment options within these portfolios.
Published on 1 day, 9 hours ago
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