Retirement 
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120 Rule vs. Target Retirement Funds

Have you ever heard of the 120 Rule? The 120 Rule is a basic asset allocation rule. Take your age and subtract it from 120. That is the percentage you should be invested in stocks and the balance should be in bonds. If you’re 40, then you should have 80% in stocks and 20% in bonds. If you’re 50, then 70% stocks and 30% bonds. It’s one of those age old “rules of thumb” that can be a good starting point for deciding asset allocation but bad as an end point. As a retiree at the age of 65, do you really want the majority (55%) of your investments in stocks? Maybe, maybe not, but your reasoning should go beyond the 120 Rule.

When it comes to Target Retirement or Lifecycle funds, not all funds are created equally.

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