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Yahoo Finance - T Rowe Price Target Date Retirement Funds

Advisor Matt Hylland was recently quoted for a story in the U.S. News and World Report, and also Yahoo Finance, about choosing target date retirement funds, specifically from T. Rowe Price.


You can find the entire article on U.S. News and World Report here: https://money.usnews.com/investing/funds/slideshows/8-top-t-rowe-price-funds-for-retirement

Or on Yahoo Finance here: https://finance.yahoo.com/news/8-top-t-rowe-price-165145835.html

Should You Invest in T Rowe Price Target Date Funds?

T Rowe Price, is one of the biggest names in investment funds today. And although the article seems to suggest the funds, we typically steer clients away from most of their funds. Why?

First, they are expensive. For example, their 2020 target date fund (designed for those planning to retire around the year 2020) charges 0.61% in fees. Today, many companies charge much lower than that. Vanguard for example, charges 0.13%. on a $100,000 portfolio, T Rowe Price charges an extra $480 per year for the exact same investment!

Lastly, T Rowe Price’s target date funds get very conservative as your retirement date passes. By design, the funds will automatically move investments from stocks into bonds as you age. However, these funds continue to do so until just 20% of your investment is in stocks!

For most, that is too conservative of an allocation. This means that over time, you may have much less growth in your portfolio than with a more typical allocation.

As always its important to check with a financial advisor before using an investment like T Rowe Price’s target date funds.

Matt Hylland