An investment mix that changes over time
Investments in American Funds Target Date Funds are allocated among a diversified portfolio of stocks and bonds. Investors select a target date fund (typically the one nearest their anticipated retirement), of stocks and bonds will gradually shift toward more conservative stocks as well as bonds. This gradual shift over time is called a "glide path."
The allocations shown reflect the funds' target allocations for January 1, 2018. The funds' investment adviser anticipates that the funds will invest their assets within a range that deviates no more than 10% above or below the allocations set forth above. Allocation percentages and underlying funds are subject to the Portfolio Oversight Committee's discretion and will evolve over time. 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 americanfundsretirement.com.
Here’s how it 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.
- The fund is managed beyond retirement, so you could feasibly use a single 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: