Is Your Retirement Slipping Away?

There’s something very enticing about a “set it and forget it” investing philosophy that involves putting your money into an asset and not thinking about it until you finally need it, which could be decades down the road. That’s the idea behind “target-date funds.”

A target-date fund is a type of mutual fund with a specific end date, often aligning with when you plan to retire. For example, if you plan to retire in 2040, then you would buy a 2040 target-date fund. The fund matures and rebalances at set intervals — usually five years, Investor’s Business Daily reported. It might start out heavily weighted toward higher-risk, higher-reward stocks and then eventually move toward safer investments such as bonds.

One way to invest in a TDF is to buy one that is actively managed, meaning a portfolio manager will make trades for you. A blog on the Blackrock website noted that with target-date funds, a portfolio manager will make trades based on a “glidepath” tool that adjusts the fund’s mix of investments over time.

“A glidepath is like an investment flight plan or roadmap,” according to Blackrock. “It helps determine the risk exposure over the course of your path through retirement by adjusting diversification levels.”

You can also opt for a passively managed target-date fund. In this case, the TDF would ideally include simple exchange-traded funds (ETFs) or index mutual funds with low expense ratios, according to Motley Fool.

No matter how you invest in a target-date fund, you want to avoid high fees that can cut into your retirement savings. This isn’t always easy, experts say.

“The fees are extremely difficult to determine,” Robert Persichitte, a financial advisor at Delagify Financial, told IBD. “SEC rules allow target-date funds to hide the bottom layers of fees and only report the fees for the target-date funds.”

An example would be if a target-date fund quoted a fee of only 0.05% but failed to mention that the TDF also owns a mutual fund with a fee of 5%. An investor might think they are getting a cheap 0.05% target-date fund, only to find out that the overall fee is 5.5%.

That’s the main downside of target-date funds — that hidden fees will take a big bite out of your nest egg. You can avoid this by finding a fund manager that waives fees for underlying funds. Some big funds do this, IBD reported — including Vanguard.

Motley Fool recommends going “all in” on target-date funds to maximize their returns. In other words, if you choose to invest in a target-date fund, then you should be a TDF investor across all your accounts. Managed properly, they can be a “great tool.” Before diving in, though, you should explore all your options to ensure that a target-date fund is the right investment for your specific needs.

3 Ways to Recession Proof Your Retirement

Stay the course. Don’t overreact. Think long-term.

Following this advice during times of economic uncertainty can do wonders for your retirement plan. But don’t mistake it as an invitation to sit back and do nothing!

There are moves you can make now while things are volatile that can pay off significantly down the road.

Let’s look at a few:

Have A Financial Pro Look Over Your Plan

You know those genius billionaires? They have financial advisors.

It's almost always a good idea to go over your long-term financial plan with an expert from time to time and you might be surprised by how much you can benefit from just one meeting.

Even if you previously developed a plan with the help of a professional, you may find that your plan needs adjusting, especially in an environment where economic factors are changing.

Choosing a financial advisor is easier than you may think. WiserAdvisor is a website that matches you to the best financial advisor for your situation. There's no cost to use WiserAdvisor, and you aren't obligated to hire an advisor.

Find your financial expert for free.

Protect Your Portfolio With Precious Metals

Pandemic, supply chain, bear market. We've seen in recent years that market-changing events are not in short supply.

Is your money safe from any of these?

The answer may be "no" If you haven't hedged your bets against the stock market and world economy.

Precious metals often outperform other investments in a volatile market, and their value tends to rise with inflation, making them an effective hedge during uncertain economic times.

Goldco is a great place to begin if you're interested in investing in precious metals. Opening a gold or silver IRA is easy and funds can be rolled over from existing retirement accounts. Or you can buy gold and silver directly from Goldco's extensive collection.

Worried you may need to sell your precious metals in the future? Goldco offers a buy back program and will purchase your assets back from you at the highest price.

Mortgage Rates Too High? Build Your Real Estate Empire Another Way

Don't let high mortgage rates slam the door on your real estate ambitions.

Want to get into the real estate game without the high interest rate or burdensome mortgage payments? One increasingly popular method is to pool your money with others.

CrowdStreet is a real estate crowdfunding company that allows you to build a real estate portfolio starting with as little as $25,000. CrowdStreet handles all the operational details while you sit back and receive passive income and property appreciation.

They specialize in growth-focused private commercial real estate projects which can include senior living, student housing, multifamily, medical offices, self-storage, industrial, and more.

Add passive income to your portfolio today.

Bottom Line

You’ve likely been saving for retirement for a long time and now is not the time to alter that big-picture thinking. Keep up the safe and steady progress while also exploring ways to make the most of your savings.

Some of the best strategies along these lines are hedging your investments with something like gold or silver and building your passive income without taking on too much risk. Whether you take part in those strategies or not, an experienced financial advisor will be able to assess your situation and define the best path forward.