It's not news to say there's a problem with target date funds (see "Are Target Date Funds a Ticking Time Bomb?", Feb. 10, 2015). What might be more interesting to discuss, though, is just what will eventually replace these Rube Goldberg investments.

Sooner or later, the market will experience one of its customary dramatic pullbacks. When that happens, target date funds will come tumbling down like so many Jills after Jack. Retirement saver will cry, consumer advocates will cry "foul," and regulator will simply foul things up per usual. 

Smart advisers, though, will already have the replacement for these popular default options. The replacements will no longer feature funds of funds as the primary vehicle, opting instead for traditional stock and bond holdings. This will eliminate those layers of unnecessary fees, a benefit that will immediately accrue to the retirement saver. Furthermore, the replacements will remove the ambiguity of the meaning of "date." 

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Christopher Carosa

Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook ( Twitter (