Aurum Wealth Management Blog

If You Thought You Planned Wisely for Your Retirement Years Ago…

Retirement planning can be confusing. I recently contributed to a national article by Paula Aven Gladych for, an online publication for benefits brokers, HR managers, and retirement advisors.

The article, Target-date Funds Have Some Critics, brings to light that some target date funds (TDFs) may not be aligned with capital preservation.


Because most TDFs have an unnecessarily high allocation to stocks, which are historically more risky that bonds.  Consider, for example, a “2010” TDF; this fund is designed for people who anticipated they would retire around 2010.  But not all “2010” TDFs are created equal.  In 2008, during the financial crisis, the most conservative 2010 fund lost -9% but the most aggressive 2010 TDF lost -41%!  How is the average investor supposed to know the difference between these two funds when they both have “2010” in their name?  The point is that not all TDFs are created equal, and you should understand what you’re getting when you make an investment for retirement.  TDFs can be appropriate as part of your retirement planning, but only if it aligns with your needs.

What can you do if you put a plan in place years ago?

  • Revisit your targeted retirement date to see if it is still realistic. 
  • Evaluate your asset allocation to make sure it aligns with your risk tolerance and consider repositioning to take advantage of the current opportunity set in today’s capital markets.
  • Update legal documents (wills, trusts, beneficiaries, etc.) to make sure you affairs are in order.  Unfortunately, bad things happen in life.  Be sure that if something were to happen to you, that your assets go to the person(s) you would like.  This is particularly important if you have young children or other dependents. 

Consulting a financial advisor is often the best way to accomplish these steps.  A financial advisor can provide clarity to topics that often paint an opaque retirement picture – topics like maximizing Social Security, evaluating life insurance policies/needs, determining the suitability of annuity contracts, and appropriately aligning your assets with your duration.  At the very least, a financial advisor is able to provide a second set of eyes on your financial situation and can offer a fresh, independent opinion.

I’m ready to help you understand TDFs and how you can ensure your financial future stays in step with your retirement goals. Learn more; call me at 440-605-7279 or any of the professionals at Aurum Wealth Management.

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