The Mediocrity of TDF 1.0
What is a Target Date Fund? A TDF is an age-defined investment strategy comprised of a sequence of professionally managed portfolios connected to form a single glide path or asset allocation mix. Its purpose is to provide a diversified portfolio for individuals saving for retirement. Unfortunately, TDFs use national averages instead of specific individual data to build portfolios. This means all individuals within a 5-year age band are lumped into the same retirement portfolio, or TDP, regardless of their financial and savings status.
The Benefits of TDF 2.0 — Personalized Investment Management
Everyone’s situation is unique, and age should not be the only determining factor in retirement investing. iGPS is TDF 2.0 that utilizes a personalized portfolio construction approach. Instead of using broad age bands like TDF 1.0 does, iGPS uses data points such as current salary, current accumulated wealth, employer match, and employee deferral as inputs to inform investment decisions. By considering these distinctive data points for each plan participant, an investment strategy can be adjusted quarterly to reflect each person’s evolving life and changing circumstances. iGPS then prudently calibrates the prudent asset allocation for each worker to reach the desired retirement outcome.
iGPS is an advanced solution that offers retirement investment personalization without sacrificing simplicity or cost efficiency. It is a TDF 2.0, giving participants and employers a more innovative investment alternative. As an evolution to the traditional Target Date Fund, iGPS is a game-changing product that enables every participant to maximize the probability of reaching their personal retirement outcome.