Lifestyle funds (sometimes known as risk based funds) have experienced a significant decrease in popularity and use in recent years. For example, very few retirement plan sponsors use these types of investment options in their 401(k) plans as QDIA's. Most plan sponsors use target date funds as QDIA's because, in comparison, lifestyle funds have a major drawback.
Over time, target date fund managers decrease the overall risk of a target date fund as the target date comes closer to the present date. Lifestyle funds don't lower their risk profiles over time. An Aggressive Portfolio will remain an Aggressive Portfolio as long as it exists. As a result, participants who invest in an Aggressive Portfolio eventually end up taking on too much risk as they age.
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