Podcast Summary

Podcast: Jill on Money with Jill Schlesinger
Episode: Should I Ditch the Target Date Fund?
Date: August 28, 2025
Host: Jill Schlesinger, CFP®
Guest/Caller: Matthew from the Mid Atlantic

Overview

In this episode, Jill Schlesinger answers a listener question from Matthew, who is contemplating whether to move out of his Target Date Fund in favor of a more aggressive investment approach. The conversation dives into Matthew's financial situation, retirement goals, investment philosophy, and the pros and cons of shifting to a higher-equity portfolio. Jill offers practical, straightforward guidance that puts Matthew's needs and personality at the center of the advice.

Key Discussion Points and Insights

Matthew’s Background (02:44–06:25)

• Profile:

  • Age: 58, single, employed full-time ($60,000/year).
  • Current 401k: $43,000 in Roth, with a 10% contribution rate—all Roth.
  • Other retirement savings:
    • Old traditional 401k (~$146,000)
    • Union savings plan (~$27,000, pre-tax)
  • Eligible for a pension at age 65 (~$1,400/mo).
  • Plans to work until age 70.
  • Social Security estimates: $2,000/mo at 67, $2,500/mo at 70.
  • Health: Good.
  • Savings: $4,800 (savings account), $8,600 (Fidelity money market/brokerage).
  • Housing: Rents for $800/mo (shares rent).
  • Total monthly expenses: ~$1,600.

• Jill’s reaction:
  "I mean, that's amazing... The reason I was asking... is also to try to figure out, like, hey, you know, are you on track?" (06:12)

The Target Date Fund Question (06:25–10:22)

• Matthew’s concern: Currently invested in a Target Date Fund (BlackRock 2035) in his Roth 401k. Considering a more aggressive allocation.

• Jill’s perspective:

  • Target Date Funds are good for getting started but can become less optimal as account balances grow and investors want more customization.
  • Jill reviews the BlackRock 2035 fund, noting it holds about 60% stocks and 40% bonds (with international components and multiple bond types).
  • Expense ratio: 0.19%, which is low, but Jill notes moving to Fidelity index funds could shave off a minor fee difference.

• Notable quote:
  "If we were to just pick, say, three different fidelity index funds... you'd have a little more control over it." (09:27)

• Consideration:
  Staying in the target date fund is not "terrible"—the main issue is whether Matthew wants autonomy and to be more hands-on.

Moving to a More Aggressive Allocation (10:22–13:10)

• Matthew’s preferred allocation: Wants 80% stocks, 20% bonds, mirroring his older, more aggressive 401k portfolio.

• Jill’s caution:

  • Recent years have favored aggressive allocations; recalls bull markets can make aggressive portfolios look “better.”
  • Emphasizes that increased equity exposure boosts both potential returns and volatility—Matthew must be comfortable holding steady through downturns.

• Notable exchange:

  • Jill: "If the market fell by 40% this year... If you don't feel like you'd be reactive to that and you could just hang in there... then I'm okay with it." (11:36)
  • Jill: “If you don't trust yourself and you feel like, oh my God, as I get older, maybe I won't do that, that's when you start to say, let me ease up on my aggressive nature.” (12:31)
  • "As long as you know the risk and you're willing to do it, yeah, why not? I mean, I think that's not a problem. And no one else is relying on you... so it doesn't seem like a terrible thing." (12:49)

• Jill’s recommendation: If Matthew is sure he can stomach the ride (the market’s ups and downs), shifting to 80/20 or 70/30 stocks/bonds is reasonable.

On Cash and Non-Retirement Investing (13:10–14:10)

• Matthew’s idea: Considering investing through his Fidelity brokerage.

• Jill’s advice:

  • Keep the current liquid assets ($4,800 savings + $8,600 money market) as emergency funds; don’t invest them now.
  • Only invest in the brokerage account once cash reserves are “piling up” beyond immediate needs.

• Notable quote:
  "Don’t do that because you don’t have that much money in savings... You never know, you might need something." (13:19)
  "You don’t have to kill it with that brokerage account. All right?" (13:55)

Notable Quotes & Memorable Moments

• On Target Date Funds:
  "I do think that they’re awesome when you’re starting out, but then you get some critical mass of actual investments and... you might be able to help yourself just by... picking a couple, maybe three funds." (07:19)
• On Taking Investment Risk:
  "If you wish to take that risk, there is really nothing wrong with it. If you think you’re going to get spooked by a drop in the market, then we try to protect you from yourself." (12:13)
• On Cash:
  "Keep that mellow. You never know, you might need something... you’ve got to have some money that’s safe." (13:20)
• Final words to Matthew:
  "You're in good shape, man." (12:56)

Timestamps for Important Segments

• Introduction and setup: 00:00–02:39
• Matthew presents his case: 02:39–06:25
• Assessment of Matthew’s finances & expenses: 06:12–07:50
• Target Date Fund evaluation: 07:50–10:22
• Discussion about moving to more aggressive allocations: 10:22–13:10
• Advice on brokerage and cash: 13:10–14:10
• Wrap-up and closing remarks: 14:11–14:52

Takeaways for Listeners

• Target Date Funds are an excellent starting point, but as your account grows and your preferences solidify, there are advantages to customizing your allocation with simple, low-cost index funds.
• Deciding to be more aggressive with investments depends on your personal risk tolerance and retirement timeline—be honest with yourself.
• Keep emergency savings intact; don’t invest necessary cash reserves.
• The right approach is ultimately the one you can stick with emotionally through all market conditions.

Episode Tone

Jill’s signature approachable, jargon-free, and practical style shines throughout the episode, offering encouragement while challenging Matthew to consider his own comfort with risk. The advice is direct but always supportive, making financial discussions relatable and actionable.