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Too many eggs in one basket?

Question: If I put most of my retirement savings into a fund that takes the year of my retirement into account, (Vanguard Target Retirement fund 2025 in my case) is that like putting all eggs in one basket? Anika, Las Vegas, NV

Answer: I don't think it's the same thing as putting all your eggs in one basket. One reason is that your money is invested in the actual securities and you have a well-diversified portfolio. There are many layers of protection--most notably your money is in segregated accounts--so that even if the parent company gets into trouble your money is safe. Another reason I'm not worried is that you're savings are probably spread across a number of financial institutions, including your bank, insurance company, and mutual fund company.

About the author

Chris Farrell is the economics editor of Marketplace Money.

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