When spring flowers bloom, we discover how our earlier plantings have paid off. Likewise, how you “seed” your financial garden today determines whether you can later harvest rich rewards. In a June 2 Grand Rapids Business Journal column, Anastasia Wiese, JD, CFP® described how to use a target-date fund to save for retirement: “It can be nice to have retirement investing on autopilot through payroll deduction and a single self-maintained investment option,” says Anastasia. “However, as with any investment tool, there are things you should consider when choosing to invest in a target-date fund.”

We can see why target-date funds appeal to employers and employees alike. They’re a relatively robust, one-stop retirement saving solution. You simply decide when you think you’d like to retire, select a fund that “targets” that date, and have your retirement contributions directed into the fund. No investment expertise is required, because the fund basically does the rest for you. You start with a relatively aggressive investment portfolio when you’re younger, and fund managers gradually reduce your exposure to market risks as you approach your target date.

Simple, yes. But even a simple solution can backfire if it’s not well aligned with your personal financial goals. Anastasia advises: “It is important to examine the specific fund you are selecting and speak with a professional adviser to determine whether target-date funds are a good fit for you and your goals.”

To learn more, read Anastasia’s article here.