Save Yourself Stress (Invest in this ONE Thing)

Investing should really be about saving yourself future stress. It seems counterintuitive assuming most people get stress from investing. However, the stress from not having enough money in retirement can be crippling. If you want to save yourself a ton of stress, try investing in this one security.

The answer = target date funds

Target date funds are mutual funds that switch their allocation based on the year in which you retire. So, if you want to retire in 2050 you would choose a target date fund that reflects that year. They are usually offered in increments of 5 years and they slowly switch allocation from being risky to more conservative each year. 

Here's why I love them, there is virtually no thought involved from the individual investor. You pick the fund that reflects the date in which you retire, you decide how much to invest from every paycheck and that's it - you're done! You let your money slowly pile up year after year and at the end you are hopefully left with a huge chunk of cash.

Target date funds are a cheaper replica of an advisor. What an advisor typically does is rebalance your portfolio depending on your risk appetite and age. Target date funds do that automatically for you. Instead of worrying about a huge portfolio with many different options you now have ONE fund that does all the leg work.

If you aren't familiar with target date funds, they are offered at almost every mutual fund company and some are definitely cheaper than others so watch out for the expenses. I am fond of Vanguard and Schwab target date funds, they are as low-cost as they come. If you don't know where to start building a portfolio, target date funds are the place. 

Need more info? Contact me!