So what’s that you’ve heard or know about Target-Date Funds? Whether or not they’re right for you is, of course, a question you can take up with the experts at Pension Parameters, but in the meantime there’s a good New York Times piece by John F. Wasik—headlined Target-Date Funds Might Not Hit Your Bull’s-Eye—that addresses the subject. Here’s the first part of the article:

“TARGET-DATE funds are all intended to do the same thing: reduce stock market risk incrementally the closer you get to your retirement target date. But that does not mean the funds, known as T.D.F.’s, are entirely adequate for every rainy-day situation. They could flip up in a strong financial wind.

“Holding a fixed number of mutual funds, T.D.F.’s are sold as a no-brainer default solution. They have gained in popularity and hold nearly a half-trillion dollars in assets, up from $71 billion in 2005, according to the Investment Company Institute. They are sold by most major mutual fund groups and are becoming mainstays in 401(k)-type plans.

“Yet T.D.F.’s may not be ideally suited to every retirement investor, particularly those near or in retirement. You have to look inside each plan and vet it carefully to see if it is right for you.

“All the funds have a “glide path” to the target date. That means the allocation will shift to more bonds and fewer stocks as the date gets closer. If you hope to retire in 2030, for example, a fund might have 30 percent stocks and 70 percent bonds by that year.

“Critics of this autopilot approach say it may concentrate too much risk in one asset class or not offer enough growth for those who will live 20 to 30 years past conventional retirement age. “