Target Date Funds

Target date funds are often mutual funds or exchange traded funds (ETFs). They hold a mix of stock, bond, and other investment funds. Target date funds are designed to be long-term investments for individuals with particular goals in mind, such as retirement or paying for college.

Most target date funds are designed so that the fund’s mix of investments changes in a way that is intended to become more conservative as the target date approaches. Typically, the funds shift over time from a mix with a lot of stock investments in the beginning to a mix weighted more toward bonds.

The name of the fund often refers to its target date. For target date retirement funds, this date would be the year you expect to retire. For example, a fund called “Lifecycle 2060 Fund” is designed for individuals who intend to retire in or near the year 2060. 

Target date funds are often available through 401(k) plans. Some 401(k) plans use these funds as the default investment for plan participants who have not selected their investments under the plan.

Both before and after investing in a target date fund, consider carefully whether the fund is right for you.

Additional Information
Investor Bulletin:  Target Date Retirement Funds