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Definition of 'Target-Date Fund'
A mutual fund in the hybrid category that automatically resets the asset mix (stocks, bonds, cash equivalents) in its portfolio according to a selected time frame that is appropriate for a particular investor. A target-date fund is similar to a life-cycle fund except that a target-date fund is structured to address some date in the future, such as retirement.
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Investopedia explains 'Target-Date Fund'
These funds have become popular with 401(k) plan investors. While proponents cite the convenience to investors of putting their investing activities on autopilot in one fund, critics are wary of these funds' one-size-fits-all approach.
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These accounts will take charge of your retirement savings, but should you let them?
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Discover a security that offers a way for you to put your retirement portfolio on autopilot.
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This "set it and forget it" approach to investing is appealing, but it's not the best protection against a bear market.
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If you prefer a "hands-off" approach to saving for retirement, target-date funds may be for you.
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If your nest egg has taken a hit, these conservative investments could help get you back on track.
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Before jumping into a tailor-made asset allocation plan, do the research - it will add years to your financial health.
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