Skip to main content

You are here

Advertisement

Younger Investors Targeting TDFs

Target date funds have become especially popular with workers in their twenties, according to a recent report from the ICI and EBRI. Among younger workers, 52% are investing in TDFs, compared with just 34% of workers in their sixties and 41% overall. Just 27% of younger workers were using TDFs in 2006, compared with 14% for older investors.

Assets in TDFs for younger workers also dwarfed those of older investors, at 34% — compared with just 13% of those in their sixties. Those numbers have grown precipitously for both groups since 2006, when they stood at 11% and 4% respectively.

All this raises at least three questions:

• Why are only 34% of assets held by investors in their twenties invested in TDFs, even though 52% are using them? (The corresponding percentages for older workers are 13% of assets with 34% participating.)
• Should TDFs be an all-or-none strategy? (For a closer look at this question, see Jerry Bramlett’s column in the fall issue of NAPA Net the Magazine.)
• Are younger people wiser investors, or is the generational difference the result of auto-enrollment?

Advertisement