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Let Me Whisper A Secret To You: A Startling Target Date Fund

Mar. 05, 2018 9:32 AM ET4 Comments
Ronald Surz profile picture
Ronald Surz


  • There’s a secret target date fund that is distinctively different. I’ll let you in on the secret. Some readers of my retirement articles have asked.
  • Target date funds are all pretty much the same, except the secret SMART Target Date Fund Index that emphasizes Prudence and Wealth Preservation.
  • In a nutshell, there are really only two types of TDFs – the herd of look-alikes (pick anyone) or SMART.

It may surprise you to know that there is a TDF that is totally different from The Herd and deserves your attention. So far it's been a secret, but I am going to let you in on it in this article. Even though it's been around for a decade, and excelled in the 2008 crash, it has much less invested in it than The Herd, so you'd think something is wrong with it, but quite the contrary there's a lot right with it. It just needs to stop being a secret. This alternative to The Herd is called the SMART Fund Target Date Fund Index collective investment funds on Hand Benefits & Trust, Houston. What SMART lacks in Popularity and familiarity it more than makes up for in Prudence beyond compare.

Different Objectives Lead Down Different Glide Paths

Let's begin with a comparison of the two glide paths, as shown in the following:

As you can see, the SMART glide path is like The Herd's until it reaches the Risk Zone that spans the 10 years before and after retirement. No copycat here - just a BIG important difference. Losses in the Risk Zone diminish standard of living in retirement or reduce the length of time that savings last, or both. This is because savings are at their highest level in the Risk Zone and Sequence of Return Risk takes hold when spending begins.

These differences arise from completely different and opposing objectives. SMART aims to not lose beneficiary savings, especially in the Risk Zone, so the emphasis is on preservation. By contrast, The Herd attempts to compensate for inadequate savings throughout its glide path, so its objective in the Risk Zone is to simultaneously grow assets and protect them, although it can't realistically achieve both. The Herd sacrifices safety in order to potentially earn higher returns. It's important

This article was written by

Ronald Surz profile picture
I'm president of  Target Date Solutions, developer of the patented Safe Landing Glide Path , Soteria personalized target date accounts, and Age Sage do-it-yourself investing. I;m also co-host of the Baby Boomer Investing Show.   My passion is helping his fellow baby boomers at this critical time in their lives when they are relying on their lifetime savings to support a retirement with dignity, so he wrote a book Baby Boomer Investing in the Perilous 2020s and he provides a financial educational curriculum I'm author of 3 books: Baby Boomer investing in the Perilous Decade of the 2020s, & 2 books on target date funds I’m smart with 2 Masters degrees and 55 years in financial consulting. I’m semi-retired, and prefer helping my fellow baby boomers rather than playing golf. I’m worried that our country, & most others, is playing with fire in its money printing. I’m here to help – that’s my legacy space.I help investors deal with life’s investment challenges, with the objective of enjoying a comfortable long retirement. I’m passionate about questioning and improving upon entrenched stale practices like jamming everyone into cookie cutter model portfolios. That's why I produce the Baby Boomer Investing Show live on Youtube and Facebook every other Tuesday at 10:00 PST. Watch live or replay by searching for "Age Sage Robo" on Facebook or Youtube. Please watch and support our Boomer Investing Show on Patreon ( https://www.patreon.com/user?u=35204315&fan_landing=true ) and visit our SA Blog at https://seekingalpha.com/account/authorboard/instablog . As president of Age Sage Robo (please Google), and CEO of GlidePath Wealth Management, I’m responsible for model development using my patented process . I have more than 50 years of financial service experience and hold a U.S. Patent for a time-tested glide path investment process that helps investors navigate the complicated financial decisions they face as they accumulate and preserve assets for their retirement years. Age Sage & GlidePath use this process to build Target Date, Special Purpose, and Life Span Portfolios that are tailored to the specific requirements of clients. My extensive financial career began at A.G. Becker Pension Consultants where I advised on the investment policies of several trillion dollars of retirement plan assets. After Becker I started my own consulting firms that developed innovative services for investors and the financial advisors who serve them. I’ve earned a BS and MS in Applied Mathematics from the University of Illinois and an MBA in Finance from the University of Chicago. I am author of the book "The Remarkable Metamorphosis of Target Date Funds" and co-author of "The Fiduciary Handbook for Understanding and Selecting Target Date Funds"Please visit https://babyboomerinvesting.show

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

I am a sub-advisor of the SMART TDF Index and the originator of the 1st and only Robo Analyst that integrates Age with Risk. Please visit my Blog at https://seekingalpha.com/author/ronald-surz/instablogs#instablogs Age Sage builds better asset allocation models that help Baby Boomers transition through the Risk Zone that spans the 5-10 years before and after retirement. Implementation of these models can be done for less than 6 basis points. Boomers are poised for a sucker punch that they’ll never shake off.

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