Target Date Funds
A target date fund is a professionally managed collection of mutual funds designed to help you invest for retirement.
One Fund, Many Benefits
A Long-Term Investment
Target date funds are designed to help you invest for retirement and meet your changing needs over time.
A Variety of Investments
Each fund is made up of a broad range of investments. That’s important when saving for retirement because spreading your investment dollars among different types of investments can help reduce volatility.
Investments That Change Over Time
Investment professionals adjust the investment mix to become more conservative as the target date approaches. This can help provide a measure of protection from market declines.
Investment professionals manage the investment mix so you don’t have to. In fact, some continue to manage the funds for an additional 30 years into retirement.
The investments in a target date fund change over time based on the target retirement date. This gradual shift is called a “glide path.”
Here’s how it works:
1. Significant stock investments throughout the lifetime of your fund can help manage the risk of outliving your savings in retirement.
2. An increased emphasis on bonds as you near your retirement date can help manage the risk of market declines.
3. May continue to be managed beyond retirement, so you could feasibly use a single fund for decades.
Experience Can Make a Difference
Our funds are managed by a Portfolio Oversight Committee, a team of veteran investment professionals that have navigated good and bad market conditions.
Our Investment Professionals Invest Alongside You
In addition to managing the funds, our investment professionals invest their own money in the funds.
Low Fees Are Crucial to Positive Investor Outcomes
There are fees and expenses associated with investing through an employer’s retirement plan. High investment fees and costs can reduce your long-term retirement savings. The lower the costs, the better it is for you.
Find Your Target Date Fund
The target date is the year closest to the year you plan to retire. To find your target date fund, add your birth year to the year you plan to retire and begin taking retirement withdrawals. The retirement age is 65 for many investors but may be different for you.
+ Retirement Age
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
Although the target date funds are managed for investors on a projected retirement date time frame, the funds' allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year in which an investor is assumed to retire and begin taking withdrawals. American Funds investment professionals manage the target date fund's portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for 30 years after it reaches its target date.
Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.