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Would you hire a someone to manage your wealth using false assumptions?

It is a bad idea, but many people unknowingly opt for such a management style in their retirement plans.

Target-date funds (TDFs) are one of the fastest growing mutual fund sectors of the last decade. These passive strategies are most popular in 401(k) and other retirement plans with limited choices and among investors with long investment time horizons.

Wall Street nicknames them “set ‘em and forget ‘em” funds because their strategy purportedly adjusts risk lower as you age. At first blush, such a strategy makes sense as risk tolerance is often a function of age. However, the purveyors of these funds fail to disclose that measuring risk is a function of the prices and valuations of assets.

Changing asset allocations based solely on the calendar is playing roulette with your financial well-being.