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Fact Box: What's a Target-Date Fund?

Target-date funds employ a mix of stocks and bonds that are put on a set glide path.

November 14, 2011
Related Topics: Finance/Taxes, The HR Profession, Retirement/Pensions, Benefit Design and Communication, Retirement Planning, HR & Business Administration, Benefits
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Target-date funds employ a mix of stocks and bonds that are put on a set glide path; over time, the investments in the fund automatically rebalance and get more conservative as workers near their targeted retirement date. Because they are easy to understand (all employees need to do is to match a desired retirement date to a target-date fund), they have become popular with plan sponsors and participants.

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