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December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review

How to Pick the Best Target-Date Fund for You

By Nellie S. Huang


Classic Target And Blue Sky from Bigstock




Target-date funds aren't as simple as they might first appear. Here's help to find ones with low fees and the right investments


Although target-date funds promise a one-step strategy for investing for retirement, there are no guarantees that they'll achieve their goals -- or yours. These funds can lose money in any given year.

Performance among TDFs can also vary dramatically. Fees, the underlying funds in the portfolios, and the changing mix of stocks and bonds throughout the fund's life span all play a role in determining how well, or how poorly, a fund performs.

Retirement plans typically offer just one target-date series from a single firm. That could mean the funds in your 401(k) are duds. Now what do you do? One easy, do-it-yourself solution: index funds, which are offered in many retirement plans. If you have four decades to go before you retire, consider investing 90 percent in a stock index fund and 10 percent in a bond index fund. Just bear in mind that bond prices fall when interest rates rise, so your bond fund may deliver substandard results until rates stabilize. And it will be up to you to adjust the allocation to fit your comfort level as you age.

If you do choose a TDF, knowing the fund's glide path is crucial to understanding its risk profile. The glide path refers to the shift in a TDF's allotment to stocks, bonds, cash and other asset classes over time. The further a fund is from its target date, the greater the allocation to stocks; the closer to its target date, the lesser the stock allocation. The move toward fewer stocks is deliberate because stocks are generally riskier than bonds and cash.

But each target-date series takes a different path. For example, although the typical 2050 fund -- designed for someone with more than 35 years to go before retirement -- has 90 percent of its assets invested in stocks, some have as much as 100 percent in stocks, while one has as little as 60 percent.

The closer you are to retirement, the larger the disparities. For instance, current stock allocations in funds dated 2010 range from 20 percent to 60 percent of assets. A major reason for such discrepancies is the way fund sponsors view the purpose of their glide path. Some glide paths keep adjusting until a fund reaches the target year, then stop. Most sponsors, however, adjust their allocations through the target year and beyond, into retirement.

You should feel comfortable with the glide-path strategy of your target-date fund from beginning to end. Read the fund's prospectus, which will illustrate the life span of the path, to learn what happens to the allocation strategy as you near retirement and after you retire.

HOW TARGET-DATE FUNDS WORK
Before you invest in a target-date fund, look under the hood. A target-date fund is only as good as its underlying holdings. In addition to getting to know the mechanics, you'll learn how the target-date portfolio tilts toward more narrowly defined classes, such as foreign stocks, small-company stocks, real estate trusts and high-yield bonds.

Some TDFs, such as those offered by American Funds, hold only actively managed funds. Others, such as Wells Fargo, use only index funds. Still others, such as Schwab, hold both active and index funds. To add to the confusion, some firms offer multiple target-date products. TIAA-CREF has one index-based series and another series that uses only actively managed funds.

Index funds either do a good job of tracking the index they're designed to mimic, or they don't. In most cases, how well an index fund performs is determined by the fees it charges.


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Assessing actively managed funds is trickier. Start by favoring funds that have been run by the same manager for at least five years and have beaten, or at least matched, their peers or an appropriate benchmark over that period. In addition, scan calendar-year returns going back to at least 2008. A TDF holding that has lagged its benchmark for more than three or four years is a cause for concern.

The average annual expense ratio of the lowest-cost share classes of all target funds is 0.7 percent, says BrightScope, which rates and analyzes 401(k) plans (TDFs are a staple of retirement plans). That includes the costs of the underlying funds as well as any additional TDF management fee. You may not have access to the cheapest share class of your fund, but you can use the 0.7-percent figure to judge the costs of your target-date series. Depending on the share class, the expense ratio for Wells Fargo's index-based target-date funds ranges from an average of 0.35 percent to a shockingly high 1.63 percent per year. Vanguard, the industry fee leader, charges an average of 0.17 percent annually. Fund prospectuses and your quarterly 401(k) statements include information about expense ratios. As always, the lower, the better.

Judging a TDF's overall results can be especially challenging. A TDF's ever-changing allocation and its broad mix of asset categories make it difficult to match the funds with appropriate indexes. Still, you can get a rough idea of a TDF's relative performance by comparing your fund with TDFs with the same target year at Morningstar.com. But your best bet is to focus on some basic criteria: fees, the strength of the underlying funds and how the fund shifts its allotment to stocks, bond, cash and other asset classes over time.

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Nellie S. Huang is a senior associate editor at Kiplinger's Personal Finance magazine.



All contents copyright 2013 Kiplinger's Personal Finance Distributed by Tribune Media Services. All rights reserved.

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