To prevent other target-date investors from being burned as so many were in 2008, when the average 2010 and 2015 fund lost 25% of its value or more, more advisers are telling their clients that they need to look closely at the asset allocation and glidepaths of these funds so that half of their portfolios are not exposed to stocks on the eve of their retirement.

“The problem with target-date funds is that the underlying message has been, ‘Look Ma, no hands!,’” Steve Vernon, an Oxnard, Calif., financial adviser told The New York Times. “They tried to make them idiot-proof. But if you put your money in a fund without knowing what they’re invested in, you’re an idiot.”

Nonetheless, many fund companies are sticking to their pre-crisis mantra that the equity exposure, even for older investors, is necessary to counter longevity of as much as 30 years or more in retirement, not to mention the associated high healthcare costs.

That said, “I think you’re going to see more graphics to illustrate the concept of the glidepath,” said John Ameriks, head of investment counseling and research at Vanguard Group. Others agree fund companies will protect themselves and the risk they assume in target-date funds through more disclosure.

That means that there are no shortcuts for target-date fund investors, contrary to the intended appeal of the funds. As The Times puts it, “unhappy 401(k) participants will have to do exactly what they had hoped to avoid by turning to target-date funds: study the options and make decision.”

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