Wed Jun 12 2024, by Tyler Gardner

How Big Banks Profit from Target Date Retirement Funds

Here’s how big banks are making millions of dollars a year by convincing you that you can’t do basic algebra. If even one dime of your money is invested in a target date retirement fund through your 401(k) or 403(b), you’ll want to stick around to hear this.

1. Simple Math

I want you to take 110 and subtract your age. Got the number? Can you do that math? I thought so. But big banks have done a genius job of convincing you that you can't.

2. Understanding Target Date Funds

A target date retirement fund does nothing more than shift your money around once a year, ensuring that 110 minus your age is invested in equities (stocks) while the remainder is invested in fixed income (bonds).

3. Your Power to Make Changes

So, if you can subtract your age from 110, which we’ve established you can, and you can set aside 10 to 15 minutes a year to adjust your investments between Fund X and Fund Y, it’s time to ask yourself why you're giving up tens of thousands of dollars in fees towards your retirement dreams.

4. Taking Back Control

By allowing these banks to treat us like two-year-olds who can’t do basic algebra, we end up funneling that money directly into their pockets. Don’t let them profit off your inaction—take control of your financial future!

If you found this information helpful, please like and follow, and I’ll keep sharing insights to help you get one step closer to your financial goals.

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