Target Date Fund is used to help determine when one can retire in a financially comfortable circumstance.  Target date fund is also known as lifecycle, dynamic risk or age-based fund that is a collective investment of mutual funds or collective trust designed to provide investment solutions that are allocated more conservatively as the target date of retirement approaches.  They offer a diversified selection of investment options and are great for younger investors. However, they are not ideal for everyone, so do what is best for you.  As you get older, it is important to understand your funds, “glide path,” which is how the funds asset allocation (stocks, bond, cash, mutual funds, etc.) changes over time as you get closer to retirement, but this is not a one-size fits all approach.  Invest based on your short-term and long-term goals. 

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Target date funds can also help manage inflation risk. First, by investing more heavily in equities earlier in your career, the idea is to grow your savings past the point of inflation. In addition, some Target Date Fund investors invest in what are called “real assets” (such as Treasury Inflation-Protected Securities and Real Estate), which traditionally have helped hedge against inflation.  For example, If you have $300,000 in savings set aside for retirement, you might ask the question, how do you know if that’s enough?  Part of the answer has to do with, how much that money will be worth when you actually retire. Inflation risk refers to the concern that your money will be worth less in the future, and you might not have enough to meet your retirement goals.  Target Date Funds are good for some, if you start saving early.  We always suggest that you do whatever is best for you and your financial situation and retirement goals.  To learn more about Target Date Funds watch this YouTube Video:

https://youtu.be/Ve73qqGms7E

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By Jason Torrents