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Well Balanced | Financial Planning, Bucket-Based Investing, Market Perspective, Wealth Management. A passionate and entertaining look at money and investing in and for retirement. For those that enjoy podcasts like Smart Money, On Investing, and BiggerPockets, Well Balanced is worth adding to your feed. Disclosures about our firm and this podcast. Vector Wealth Management is registered as an investment adviser with the Securities Exchange Commission (SEC). Registration as an investment adviser does not constitute an endorsement of the firm by securities regulators nor does it indicate that the adviser has attained a particular level of skill or ability. A copy of Vector’s current written disclosure brochure filed with the SEC discusses among other things, Vector’s business practices, services, and fees, and is available through the SEC’s website at: www.adviserinfo.sec.gov. All content in this podcast is for information purposes. Opinions expressed herein are solely those of Vector Wealth Management, our staff, and guests. Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed directly and in detail with your financial advisor prior to implementation. This podcast and related content are not intended to render personalized investment advice, nor should it be viewed as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities or strategies discussed. Please note that neither Vector Wealth Management nor any of its agents give legal or tax advice. The firm is not engaged in the practice of law or accounting. Charts, graphs, and returns do not represent the performance of Vector Wealth Management or any of its advisory clients. Returns do not reflect the impact that advisory fees and other expenses would on the results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client’s portfolio. All investment strategies have the potential for profit or loss. Past performance is not indicative of future performance. Visit vectorwealth.com/regulatory for the firms form CRS and ADV.
Episodes
Thursday Jun 19, 2025
Thursday Jun 19, 2025
In this edition of The Well Balanced Podcast, Ezra Firkins sits down with Senior Wealth Advisor Mike Nesheim to unpack a scenario that pre-retirees face: I’ve got a target date fund in my 401K and I plan to retire in the next few years.
What next?
Mike and Ezra explore how target date funds work, why they’re often a great accumulation tool, and when it might make sense to move beyond them.
Here are 7 key takeaways about target date funds:
1. Target Date Funds Offer Built-in Diversification
Target date funds are “funds of funds” — they include a mix of domestic and international stocks, bonds, and cash. This provides a simple, cost-effective way to achieve diversification within a single investment, especially within retirement plans like 401(k)s.
2. They Follow a Glide Path Strategy
These funds automatically adjust their asset allocation over time, reducing equity exposure and increasing fixed income and cash as the target retirement year approaches. For example, a 2030 fund may move from 90% equities decades out to 60/40 near retirement.
3. They’re Designed for the Average Investor, Not the Individual
Target date funds use a “one-size-fits-all” model. While they can be a good fit during accumulation years, they don’t account for individual needs like healthcare costs, specific withdrawal timelines, or legacy planning.
4. Withdrawal Mechanics Can Be Inefficient in Retirement
When you take distributions from a target date fund, you’re selling both stocks and bonds in proportion to the fund’s allocation. This can be suboptimal during market downturns, as it may force selling equities at depressed values.
5. They Aren’t Built for Strategic Tax Planning
Target date funds don’t allow for intentional asset location (e.g., placing stocks in Roth IRAs for growth, or bonds in taxable accounts for stability). Personalized portfolios can be more tax-efficient.
6. They May Not Reflect Your Risk Tolerance or Legacy Goals
For investors with assets earmarked for heirs or charitable giving, target date funds may reduce equity exposure too aggressively. Customized plans can maintain higher stock allocations for long-term growth when appropriate.
7. Flexibility During Market Shifts
Target date funds don’t allow you to selectively draw from low-volatility assets in a downturn. In contrast, a bucket strategy — like the one used at Vector Wealth Management — offers withdrawal flexibility that helps clients stay invested with confidence.
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All content discussed in our podcasts, videos, or related blog articles are for informational purposes and should not be construed as individualized financial advice.
Opinions expressed herein are solely those of Vector Wealth Management, our staff, and guests. Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed directly and in detail with your financial advisor prior to implementation of a strategy or investment. This podcast and related content are not intended to render personalized investment advice, nor should it be viewed as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities or strategies discussed.
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