Best Practices Lisa A. Massena, CFA Best Practices Lisa A. Massena, CFA

Grant’s Go-To’s: SFRP’s Aim at Target Date Funds as Default Investment Option

Determining the “default” investment for savers who do not make a decision about where to direct their contributions is a weighty decision. The downside of putting the money into investments that carry more risk, and a greater potential for loss, is obvious. But parking the contributions in a “safe” investment with lower risk means participants’ accounts may not grow sufficiently to provide significant income security in retirement. Increasingly, target-date funds (TDFs) have become a popular solution.

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