Target-Date Funds vs. S&P 500 Indexing: What’s the Difference?

Target-Date Funds vs. S&P 500 Indexing: An Overview

Target-date funds are a popular choice for 401(k) retirement plans. The appeal is clear: The mix of investments in the fund is tailored to the current age of the investor. The fund is rebalanced over time to reflect the degree of risk appropriate at each stage of the person’s career.

The convenience alone is part of the appeal. The employee doesn’t have to do a thing to update the portfolio. Nevertheless, target-date funds can…