Target Funds That Don't Double-Dip

These one-stop funds are easy. But do they cost too much?

So-called target funds, used to save for retirement, are made up of collections of other funds. Aren't the fund companies double-dipping on fees -- charging you for the target fund and the funds they invest in, too?

Target-date funds are great for busy investors. These funds operate on autopilot, spreading assets among stocks, bonds and cash (typically using other funds to do so) and adjusting the mix to become more conservative as retirement approaches. A few fund families still layer two fees into their target funds, but such double-dippers as the American funds and American Century aren't all that expensive, anyway.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Anne Kates Smith
Executive Editor, Kiplinger's Personal Finance

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage,  authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.