Kim Miller, CFP®

Hi - Are you asking about a 401k account? Assuming you are, you can withdraw your funds if you no longer work at the sponsoring employer. BUT - it is probably a bad idea. The amount of funds withdrawn will be taxable as ordinary income - i.e., it will be taxed just like wages or salary, and you will pay a 10% penalty tax in addition to the income taxes unless you qualify for one of the exceptions. Leaving an employer is not one of the exceptions. What you SHOULD do is a direct transfer to a Rollover IRA account which you can set up at any number of brokerage companies, banks, credit unions or insurance companies. A direct transfer of the funds avoids both income taxes and the penalty tax and preserves your funds for your future. Regardless of the choice you make, you need to contact the company that runs the plan to take any action. Good luck!

Dave - I think you answered your own question in your last sentence. Consider that most Target Date funds are constructed with underlying mutual funds that represent the different stock and bond markets to which the fund manager thinks you should have exposure (there are some Target Date funds that have other asset classes, but the vast majority are built from stocks and bonds). To the extent that the underlying funds are actively managed, the Target Date fund is actively managed. You can see an x-ray of the underlying holdings of almost any Target Date fund at www.morningstar.com. Target Date funds re-balance their mix on a schedule, usually quarterly so you really have two levels of "active" management in many Target Date funds - management in the individual funds and management at the Target Date fund level via re-balancing. (Vanguard offers Target Date funds as well but many of their mutual funds are passively-managed index funds so arguably you would not be getting the same level of active management in a Vanguard Target Date fund, but the difference is probably immaterial). Assuming you have a choice of fund families, check the funds' underlying holdings before making a decision. Target Date funds are marketed as "one size fits all" and I believe such marketing gives investors a false sense of security (hope?). You can get a sense of my meaning by checking the returns of Target Date funds in 2008. Lastly, Target Date funds are fundamentally flawed in that the investor has no idea of what is going on in the underlying funds. Caveat emptor.

Hi - The first question you would need to answer is what am I investing FOR? WHY am I investing? WHAT is my objective? If it is merely to "make money" I recommend you have a conference with yourself and come up with a more specific goal such as "I want to have an income of at least $2,000 per month during my retirement starting at age 65". Most of what we do every day is controlled by our subconscious mind and the subconscious mind does not respond to general thoughts or ideas but to specific goals and objectives. So only after you have determined the WHY should I invest (with as many specifics as possible) can you determine the HOW should I invest. HOW includes not only the type of investment (stocks, bonds, mutual funds, etc) but what type of account/s should I use - 401k, IRA, Roth IRA, taxable account, etc.? Age is certainly a factor - the younger you are the more aggressive you can be as you will have more time to make up for investing mistakes - because you will make mistakes. The most damaging mistake you can make is trading too much. Many investors are convinced they can "time the market" catching the up trends and avoiding the down trends. Surveys have been done that show that a large majority of the people in a given survey (regardless of the survey subject) think they are "above average" at whatever skill the survey is studying. It is mathematically impossible for the majority of people to be "above average" at a particular skill. Investing is no different. Your income could be a factor if all of your take home pay goes to household overhead. This probably seems obvious, but no one should start an investing plan if it takes food off the table. A spending plan can help anyone get a handle on income and expenses and saving and investing should be a part of any spending plan. "Family situation" is too broad to consider here - that could mean anything. To sum up, you want to determine WHY you are investing before proceeding to the HOW.