Target-date funds are appealing for investors who desire a one-stop retirement savings solution. According to Morningstar, total assets in target-date funds grew to more than $763 billion through the end of 2015, up from $706 billion in 2014.

These funds are designed to take the guesswork out of managing your asset allocation but the question is, where do they fit in your plan as you transition from accumulating assets during your working years to spending them in retirement?

Deciding whether to hold on to target-date funds – or or ditch them – once you retire can affect your broader financial outlook in your later years. If retirement is getting closer, nows the time to think about how, or if, target date funds fit in your investing strategy.

Start by breaking down the funds assets. If youre more of a hands-off investor, its easy to overlook exactly whats in a target-date fund but thats a mistake you dont want to make.

You really need to look under the hood of the fund to understand the mix of assets to determine if staying in the fund is right for you, says Justin Smith, a certified financial planner with Chicago-based Slayton Lewis.

Smith says that in his experience, target-date funds tend to be a bit too conservative once they hit their target date, leaving retirees without enough earning power to withstand inflation and make their portfolio last for another 30-plus years.

Sean McDonnell, a certified financial planner with Advance Capital Management in Southfield, Michigan, says one way investors can evaluate target-date funds is to ask themselves whether the underlying investments are appropriate for the type of retirement theyre planning.

Target-date funds vary widely – funds with the same target date can be more conservative or aggressive than their counterparts, McDonnell says.

He encourages investors to really dig in and understand how their target date allocation is being invested. Thats not something you can do just once, however.

If the asset allocation of the target date fund is aligned well with the income and growth needs of the individual, then retaining the target-date fund may be prudent, says Clay Webb, head of asset allocation with The Private Client Reserve of U.S. Bank. Since the asset allocation of the target-date fund may continue to change over time, a disciplined review of the target date fund should be followed.

Consider your investing style. Target-date funds may be more suitable for certain types of investors than others and its important to be clear about where you fall on the spectrum.

Staying in a target-date fund after reaching retirement makes sense if you want a professionally managed, well-diversified retirement allocation, says Rich Lang, vice president of the target-date fund series at Capital Group in Los Angeles. The reasons are similar to why someone might choose a target-date fund for their pre-retirement planning – they prefer not to have to make fund selections themselves.

John Gajkowski, co-owner of Chicago-based Money Managers Financial Group, says investors cant lose sight of the fact that target-date funds lack the personalization factor.

Target-date funds are designed to address the needs of a mass demographic and will not be reflective of your particular situation, Gajkowski says. As you prepare for retirement, you want to be very me focused.

While target-date funds can be convenient, they dont offer the same degree of control and flexibility that may be needed to create a retirement plan that accommodates your financial needs and lifestyle aspirations.

Your personal risk tolerance is another important marker to focus on as you evaluate whether maintaining your target-date fund investments is the right move. Gajkowski says looking at the funds design can offer some clarity.

If designed as a through retirement fund, its likely to be made up of a larger percentage of equities, which would offer more growth potential and greater downside exposure during retirement when making withdrawals, Gajkowski says.

A fund thats designed to retirement, on the other hand, would be composed primarily of bonds and cash, which would limit downside exposure while also limiting long-term growth potential. That could be vital, depending on how much wealth youve accumulated for retirement.

Think about where youd keep them. If youre going to hang on to your target-date funds in retirement, your choice of investment account matters.

Lou Cannataro, senior partner at Cannataro Park Avenue Financial in New York City, says investors should always have two buckets going for retirement: an employers 401(k) plan and an individual retirement account (IRA). If you have target-date funds in an employers plan, you may be torn between letting them stay put and rolling them over.

Investors need to realize that once somebody hits retirement, the sole goal of accumulation is replaced with a multitude of other concerns, Cannataro says.

That includes managing housing costs and income needs, principal protection, inflation protection, longevity and the proper liquidation of retirement assets, while keeping your tax liability under control. All these factors can influence whether you keep target-date funds in a 401(k) or roll them over.

Smith advises retirees to be cognizant of both fund fees and plan fees when keeping target-date funds inside a company retirement plan.

Paying excess fees will cut directly into the money you can utilize for cash flow, so keep an eye on them, Smith says.

He says that investors who have multiple accounts, like traditional and Roth IRAs or taxable accounts, in addition to an employers plan may have more optimal ways of positioning their portfolio.

Instead of buying an all-in-one target-date fund, you could save on taxes by strategically locating some assets, like bonds, in the IRA and tax-efficient investments like stocks in taxable accounts, Smith says. Its a bit more complicated but it can generate significant tax savings in many situations.

One thing that investors have to remember with an employers plan is that required minimium distributions kick in at age 70.5. Those distributions would then be taxable.

Webb says investors need to thoroughly weigh their options if theyre planning to exchange target-date funds for a different type of investment in retirement.

For investors who prefer to more directly control their asset allocation and tax realization, lower cost index funds may be the best option, Webb says, but the trade-off is that it requires more active monitoring on the part of the investor.

The key, Webb says, is to recognize that the answer is not the same for everyone.

8 Retirement Milestones That Affect Your Investment Decisions

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