A target-date fund is an all-in-one portfolio tied to a retirement year (for example, 'Target 2055'). It holds a mix of stock and bond funds and gradually shifts toward bonds as the date approaches — the 'glide path.' It's the simplest hands-off option for many investors.
Target-Date Funds
Pick your retirement year; the fund handles the rest.
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How they work
You choose the fund closest to your expected retirement year. Early on it's stock-heavy for growth; over time it automatically rebalances toward bonds to reduce risk. You never have to adjust anything yourself.
Pros and cons
Pros: one decision, automatic diversification and rebalancing, very low maintenance. Cons: you give up fine control, and expense ratios vary — some are very cheap (index-based target-date funds), others are pricier. Check the fund's expense ratio and whether it's built from index funds.
Educational information only — not investment advice, and not a recommendation to buy any security. Expense ratios are approximate and can change; verify with the fund issuer. We are not a licensed financial advisor.
Frequently asked questions
Are target-date funds a good choice?
For hands-off investors they're a solid default, especially low-cost index-based ones. This is educational information, not advice.
Can I hold a target-date fund in a 401(k)?
Yes — they're a common default option in workplace 401(k) plans.
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