There's no denying that target-date funds are easy to understand and wildly popular with 401(k) plan participants, especially among new and inexperienced investors. But their performance has fallen considerably short in a still-fragile economy, as leading fund managers have pursued misguided strategies.

These developments come at a time when retirement savings clearly need to be maximized. So, the question becomes: Are participants better off switching to another fund that could bring better returns or should the TDF model be redesigned to better address stock market volatility?

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