So-called lifecycle or targeted-maturity funds have proved a boon to retirement planning, according to report by the Vanguard Center for Retirement Research at The Vanguard Group. The study found that the ease of using them has helped double the number of define contributions offering them, from one-third to two-thirds of the total number of plans. Lifecycle funds were also found to increase plan participation by newly eligible employees from 39% to 45%. One downside, according to the report, is that participants risk undermining the effectiveness by investing in too many different lifecycle options rather than putting their money in only one. Targeted-maturity funds “can help fill the gap” for retirees whose define-contribution plan may fall short of its goals, says the Vanguard report.
