Target date funds
The American Funds Target Date Retirement Series® is a professionally managed collection of mutual funds designed to help you invest for retirement and meet your changing financial needs over time.
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 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 date. Over time, that fund's mix of stocks and bonds will shift toward more conservative investments. This gradual shift over time is called a "glide path."
Here’s how it works:
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.
Our Target Date Solutions Committee brings a diversity of experience and draws on the fundamental research and quantitative resources of the global Capital Group team.
Our approach to allocating between stocks and bonds puts more emphasis on stocks than some other target date funds. This helps manage the risk of investors outliving their savings. We also place a greater emphasis on dividend-paying stocks in an effort to provide more equity exposure while managing volatility.
In addition to managing the funds, our investment professionals invest their own money in the funds.
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 portfolios are managed for investors on a projected retirement date time frame, the allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year that corresponds roughly to the year in which an investor is assumed to retire and begin taking withdrawals. Investment professionals manage the portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the target date gets closer. Investment professionals continue to manage each portfolio for approximately 30 years after it reaches its target date.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.
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