Today, one of the most popular ways to save for retirement is a target-date fund, or lifecycle fund. And for good reason—target-date funds are easy to select during enrollment, and they offer an attractive set-it-and-forget-it approach to investing.
Even so, while target-date funds can be great starting points, they only take into account one piece of information: age. To illustrate how this might play out, imagine two people. One is single and has been maxing out their retirement savings since they were 21. The other had to prioritize student loan payments, has a family to support, and is just getting started saving for retirement. If both are 35, that single piece of information would drop them into the same fund.
The point is, a one-size-fits-all approach doesn’t always fit all. Everyone’s financial situation is different. That’s one of the great things about our Advice ExpressOpens in a new window tool. It’s a quick, easy way for you to get a recommendation on how to allocate your retirement portfolio in a way that’s customized to your lifestyle and goals. Here are five reasons to give it a try:
1. Advice Express considers your whole financial picture
The tool takes into account your age, income, savings rate and account balance to provide a portfolio allocation recommendation that fits your goals to and through retirement. It can also include lifetime income options, which target-date funds do not provide.
|Considers your...||Advice Express strategy|
|Age and years until retirement||✔|
|Tolerance for risk||✔|
|Options for lifetime income in retirement||✔|