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birb_cromble  14hr ago (text post)   172 thread views

Qeekly Finance Thread - 2026-10-24

A weekly thread to discuss financial matters - from personal all the way up to global.

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Target date funds get a lot of attention in retirement planning, but many financial planners suggest that the recent underperformance of bonds relative to equities make their glide paths too conservative.

What is your opinion on that kind of one stop shop for retirement?

Ignoring the fact that many corporate plans only offer a TDF, they seem like they're great for the average saver who might otherwise choose to do nothing. I've split the difference and contribute to one in my 401(k), but selected a date farther into the future than the one that most closely matches my retirement date.

I'm a fan. I personally wish the furthest out had a lower bond allocation than what I've seen (8-10% seems to be the base; I'd appreciate the option of 5 or less), but they're a great default option, the asset mix means they'll never be the worst performer in a list of options which is great for psychological reasons, and for the vast majority of people with 401ks, "don't letter 'better' be the enemy of 'good enough'" really needs to be the philosophy.

If anything, though, recent papers on retirement allocations have me thinking their main problem is at the end of a career, not early (where the limited bond allocation doesn't have too much of an effect). From what I've read (mandatory disclaimer: God Almighty am I not an expert), it's looking like a "bond tent" may be the way to go: that is, after it reaches the conservative retirement allocation, instead of staying flat, the glide path reverses, and starts shifting back to more equities once the worst "sequence of return risk" years are past.

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