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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

March/April 2020

Hitting Your Investing Target

Hitting Your Investing Target

If you lack the time to allocate your retirement plan assets on your own, target-date mutual funds* may be an option for you. Similar to age-based, lifecycle and target-risk funds, target-date funds are designed to follow an investing path that changes when risk tolerance and time horizons change.


Popular Choice
The 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2016 report from the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI) found that three-quarters of 401(k) plan participants studied had access to target-date funds and 21% of assets were invested in them. While some people may associate these funds primarily with older employees, the analysis found that about half of the 401(k) assets of participants in their twenties were invested in target-date funds at the end of 2016. About 18% of those in their 60s invested in target date funds.


Pros and Cons
In a world where time is a commodity, target-risk funds do the work for investors. These funds are typically identified by the target retirement year. For example, a 2025 fund is for near-retirees, a 2060 fund is for younger investors and there are a host of options in between. Generally, they start with a balanced portfolio that may include stock and bond mutual funds, and that mix becomes more conservative as the target date nears. Target funds rebalance automatically, which is another convenient feature. Bear in mind, the principal value in a target date fund is not guaranteed at any time, including at the target date.


While this automatic approach to retirement investing has its advantages, it may not be right for every investor. If you plan to retire much earlier or later than normal retirement age, which is currently 67 for most workers, the fund’s asset allocation may not fit your time horizon. Another potential disadvantage is that you still need to integrate target funds with other retirement investments to ensure you remain on track. Your financial professional can tell you more.


* Investors should consider the investment objectives, risks, charges, and expenses of the fund carefully before investing. Contact the issuing firm to obtain a prospectus which should be read carefully before investing or sending money. Because mutual fund values fluctuate, redeemed shares may be worth more or less than their original value. Past performance won’t guarantee future results. An investment in mutual funds may result in the loss of principal.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
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