Baby Boomer Jeopardy In Target Date Funds

Baby boomers in target date funds face high sequence-of-return risk: 40% odds of a loss in 5 years. Click here to read my latest analysis of TDFs.

In the 1971 hit movie Dirty Harry, Clint Eastwood points his .44 Magnum – the most powerful handgun in the world – at the bad guy and asks: “Do you feel lucky today, punk Summary - Baby boomers in target date funds face a 40% chance of experiencing at least one investment loss in the next five years. - Sequence of Return Risk peaks during the five years before and after retirement, making this period critical for TDF investors, especially baby boomers because they are in the Risk Zone. - Most TDFs are high risk at the target date, but a few, like the Federal Thrift Savings Plan, offer about half the risk of loss.

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