Don’t Put All Your Faith in Target-Date Funds
Most options of 401(k) include target-date funds that help you take more risk when you’re young and become more conservative over time, aging along with you. For this very reason, they are more aggressive in your 20s and 30s and become less risky as you get closer to retirement.
While the approach is safe in principle, target-date funds do have their drawbacks, one of them being that they are not always customized to your own personal investment objectives and risk tolerance. For instance, if you’ve already made some conservative investments in your taxable investment account, it might not be necessary to be so stiff with your 401(k) even as you approach retirement.