This article was originally published at The Humble Dollar

Amid this year's market wreckage, perhaps the most disappointing performers have been target-date retirement funds (TDFs).

Many 401(k) investors are familiar with these products. Just one of these funds can be used throughout your investment lifetime, as it automatically shifts from a stock-heavy portfolio in the decades leading up to the targeted retirement date to owning more bonds in the years immediately before and after the target year. Normally, performance is pretty steady for TDFs close to their target date, thanks to their high bond allocation.

Not this year. The 10-year Treasury yield has nearly doubled since the start of 2022, leading to massive bond market losses. Remember, higher yields mean lower bond prices. The rate surge has also driven down stocks, as the value of future profits is discounted even more steeply. That’s meant a double-whammy for folks in balanced mutual funds and TDFs.

TDFs came about in the early 2000s, but they have never seen a year like 2022, with both global stocks and bonds falling sharply. Vanguard Group’s TDFs are down between 10% and 15% in 2022. What about the past 12 months? Whether you look at the relatively low-risk Vanguard Target Retirement Income Fund (VTINX) or the most aggressively invested Target Retirement 2065 Fund (VLVVX), losses are uniformly around 6%.

Is it time to ditch your TDF? No way. If you’re like me—in your accumulation years—a TDF within your 401(k) or IRA continues to make sense so long as its annual expense ratio is under, say, 0.1% per year. What about those nearing or in retirement? You might consider tailoring your investment strategy, rather than sticking with an off-the-shelf target-date fund.

Why? Retirement expert Michael Kitces argues that the most risk-sensitive period is the initial retirement years. This is when your portfolio is likely at its largest and thus a large market downturn can have the biggest dollar impact, potentially derailing the rest of your retirement. After that, a more aggressive portfolio could be warranted. Moreover, a large retirement account balance could benefit from going with lower-cost individual index funds rather than owning a single TDF.

Another tip: In a regular taxable account, it’s better to hold plain stock index funds or, better yet, exchange-traded funds than TDFs. Many folks found this out the hard way while filing taxes this year. In late 2021, Vanguard’s TDFs paid out huge distributions that were taxable to those holding a TDF in a taxable account. That meant a hefty capital gains tax bill.

Faced with lousy returns from both stocks and bonds, this isn’t the time to abandon your long-term investing glide path toward retirement. But it might be a good opportunity to check you have the right funds in the proper account type. If that means selling a TDF in a taxable account, you’ll find your realized capital gain is smaller thanks to 2022’s market swoon—and perhaps you’ll even harvest losses that trim your 2022 tax bill.