The investments in a target date fund change over time based on the target retirement date. This gradual shift is called a “glide path.”
Our objective-based glide path
The target allocations shown are as of January 1, 2019, and are subject to the Portfolio Oversight Committee's discretion. The funds’ investment adviser anticipates that the funds will invest their assets within a range that deviates no more than 10% above or below these allocations. Underlying funds may be added or removed during the year. Changes in the equity allocation within the underlying equity-income and balanced funds may affect the overall equity exposure in the target date funds. For quarterly updates of fund allocations, visit AmericanFunds.com.
How a target date fund works:
- Significant stock investments throughout the lifetime of your fund can help manage the risk of outliving your savings in retirement.
- An increased emphasis on bonds as you near your retirement date can help manage the risk of market declines.
- A fund may continue to be managed beyond retirement, so you could feasibly use that target date fund for decades.
The benefit of saving for retirement
Target date funds make it easy to start saving for retirement. Of course, the longer you have to invest, the better your potential to realize your retirement goals.
See how contributions to your plan could add up over time:
* This hypothetical example is for illustrative purposes only and does not reflect the results of any particular investment, which will fluctuate with market conditions. An 8% average annual return rate, compounded every two weeks, is assumed. Withdrawals before age 59 1/2 may be subject to income taxes and, if applicable, to a 10% federal penalty tax.
For fund results or for information about your retirement plan, talk with your plan provider or employer, or visit your plan’s website.