Investors Show Dwindled Interest in TDFs
New research supports the idea that investors are moving on from a once-highly popular savings vehicle, but additional analyses show otherwise.
The Allspring Global Investments 2025 retirement study, “By Default or By Design?” finds that 84% of respondents to its survey prefer other investment options over target-date funds (TDFs), with many preferring tailored investment methods rather than a one-size-fits-all approach.
Further, 65% of total 401(k) assets in Allspring’s research were reported to not be in TDFs and 98% of total individual retirement account (IRA) assets did not include the funds.
“Navigating retirement today requires more than just default solutions, particularly for mature participants,” said Nate Miles, head of Retirement at Allspring Global Investments. “Our research shows that understanding the diverse needs of retirees and near-retirees—and designing plans to meet those needs—can make a real difference in outcomes.”
While managed accounts have increased in appeal among investors, studies show that TDFs remain a dominant investment vehicle. A 2025 Morningstar report found that TDF assets grew to a record $4 trillion in 2024, while a separate analysis from the Public Research Retirement Lab (PRRL) showed a surging popularity in the funds from younger investors.
Still, PRRL’s research reported that while younger investors in their 20s tended to invest in TDFs, stable-value funds were more popular among older participants enrolled in 401(a) and 457(b) plans.
Additional research expects to see TDFs—whether custom or off-the-shelf—as a primary vehicle for alternative assets in defined contribution (DC) plans, as more assets managers incorporate private market investments into 401(k) plans.
Allspring’s 2025 retirement study surveyed 1,515 adults who were primary or joint household financial decisionmakers and U.S. residents. It included 726 near-retirees and 789 retirees with at least $200,000 in household investible assets.
Additional findings from the study can be found here.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
