Sunday, February 22, 2009

Target-date retirement funds are getting into trouble

Target-date retirement funds are performing poorly, and the Senate’s Special Committee on Aging is due to take them up Monday Feb. 23. These funds are supposed to move funds around automatically as workers approach retirement. But many bonds have done poorly because of the collapse of banks, so such a strategy seems to no longer work. The possibility of bank nationalizations and various bankruptcies affects bond holders, too, including whether they own senior or junior debt.

The story by Ylan Q. Mui is “Senate Weighing New Rules for Retirement Funds” on page F1, Business, of the Washington Post, Feb. 22, 2009, link here.

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