TDFs Popular with Female and Younger Investors

Target-date funds are the most popular asset allocation strategy, especially for women, according to data from MassMutual’s Retirement Services Division.

In the first quarter of 2014, 28.4% of women’s assets were allocated to asset allocation accounts as opposed to 27.7% of men’s assets, MassMutual data shows. Those allocations have increased in the past five years by 42% for women and 38% for men.

The data also indicates Generation Y or Millennials—those between the ages of 20 and 37—are gravitating to target-date funds (TDFs) and other asset allocation strategies in ever greater numbers, more so than their Generation X (ages 36 to 48), Baby Boomer (ages 49 to 68) or Silent Generation (age 69 and older) counterparts. A total of 52.1% of the retirement assets for Millennials were in asset allocation accounts in the first quarter of 2014, an increase of 3.3% from the same time a year ago.

The growing acceptance indicates Americans are looking for simpler long-term retirement savings solutions, says Farnoosh Torabi, a financial planning coach and author who is a consultant for MassMutual.

“Choosing from a menu of a dozen or sometimes even dozens of different investment options and then figuring out what percentage of your retirement dollars to allocate between them can be mind-numbingly complex,” says Torabi. “Target-date funds offer an easy solution for many people, providing instant diversification, risk management and asset reallocation as they approach retirement.”

While there is no one-size fits-all answer for every retirement investor, TDFs can meet a wide range of investment needs through a single investment solution, adds Elaine Sarsynski, executive vice president of MassMutual’s Retirement Services Division. Sarsynski, based in Enfield, Connecticut, expects TDFs and other asset-allocation strategies to become increasingly popular with retirement plan participants.

She points to the fact that investments earmarked towards asset allocation accounts have increased by 39% since 2009, which seems to indicate that TDFs and similar strategies are gaining traction.

“MassMutual is seeing greater acceptance of asset allocation strategies for retirement planning, especially by women and younger workers,” notes Sarsynski. “We attribute the growth in popularity to more employers offering target-date funds to meet a growing demand. American workers are opting for retirement savings strategies that are simpler to understand, easier to manage, and reflect their changing needs as they approach retirement.”

MassMutual's Retirement Services Division offers a range of products and services for corporate, union, nonprofit and governmental employers' defined benefit, defined contribution and nonqualified deferred compensation plans. More information is available at or