From the May 2007 issue of Boomer Market Advisor • Subscribe!

An answer to the boomer pension mess?

A recent article in the Financial Times suggests that lifecycle funds might be one answer to boomer pension woes.

Lifecycle funds are the latest rage in fund investing. They automatically rebalance the client's portfolio to a more conservative allocation as retirement approaches.

According to the paper, the attraction is that this is truly the only fund that an individual, in theory, should need. Lifecycle funds have grown rapidly over the past five years. Assets have roughly tripled since the 2000-2002 bear market. It suggests that their popularity makes it feasible to try using lifecycle funds as the bedrock for another
attempt at reforming pensions within the United States.

"There are problems with the lifecycle fund approach," the paper reoprts. "But in principle it is not unlike a reinvention of such old-fashioned concepts as the endowment fund, or the defined benefits pension. In this case, the old ideas look good."

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