Target Date Funds: Fidelity's Guide to Retirement Investing

Investing for retirement can be a daunting task, but it doesn't have to be. Target date funds are a great way to simplify the process and make sure you're on track to reach your financial goals.

Fidelity offers a variety of target date funds to choose from, each with a different investment mix that is designed to meet the needs of investors who are retiring in a specific year. The funds are automatically rebalanced over time, so you don't have to worry about making any changes yourself.

How Target Date Funds Work

Target date funds are designed to provide a one-stop solution for retirement investing. They are typically invested in a mix of stocks, bonds, and other assets that are appropriate for your age and risk tolerance. The investment mix changes over time as you get closer to retirement. For example, a target date fund for someone who is 20 years away from retirement will be invested more heavily in stocks than a fund for someone who is 5 years away from retirement.

As you get closer to retirement, the fund will gradually shift its investment mix to more conservative investments, such as bonds. This helps to reduce your risk of losing money in the years leading up to retirement.

Benefits of Target Date Funds

There are several benefits to investing in a target date fund:

• Simplicity: Target date funds are a simple and easy way to invest for retirement. You don't have to worry about choosing individual investments or rebalancing your portfolio over time.
• Diversification: Target date funds are diversified across a variety of asset classes, which helps to reduce your risk of losing money.
• Automatic rebalancing: Target date funds are automatically rebalanced over time, so you don't have to worry about making any changes yourself.
• Low cost: Target date funds are typically low-cost, which can save you money on investment fees.

Choosing a Target Date Fund

When choosing a target date fund, it's important to consider your age, risk tolerance, and investment goals. Fidelity offers a variety of target date funds to choose from, so you can find one that meets your specific needs.

Investing in a Target Date Fund

You can invest in a target date fund through Fidelity's website or by calling a Fidelity representative. The minimum investment amount for Fidelity target date funds is $2,500.

Withdrawing from a Target Date Fund

When you reach retirement age, you can start withdrawing money from your target date fund. You can withdraw as much or as little as you need, and you can continue to invest any remaining assets in the fund.

Target Date Funds: A Smart Choice for Retirement Investing

Target date funds are a smart and easy way to invest for retirement. They offer a simple, diversified, and low-cost solution that can help you reach your financial goals.

Frequently Asked Questions About Target Date Funds

What is a target date fund?

A target date fund is a type of mutual fund that is designed to provide a one-stop solution for retirement investing. The funds are automatically rebalanced over time, so you don't have to worry about making any changes yourself.

How do target date funds work?

Target date funds are invested in a mix of stocks, bonds, and other assets that are appropriate for your age and risk tolerance. The investment mix changes over time as you get closer to retirement.

What are the benefits of target date funds?

There are several benefits to investing in a target date fund, including simplicity, diversification, automatic rebalancing, and low cost.

How do I choose a target date fund?

When choosing a target date fund, it's important to consider your age, risk tolerance, and investment goals. Fidelity offers a variety of target date funds to choose from, so you can find one that meets your specific needs.

How do I invest in a target date fund?

You can invest in a target date fund through Fidelity's website or by calling a Fidelity representative. The minimum investment amount for Fidelity target date funds is $2,500.

How do I withdraw from a target date fund?

When you reach retirement age, you can start withdrawing money from your target date fund. You can withdraw as much or as little as you need, and you can continue to invest any remaining assets in the fund.

Tips for Investing in Target Date Funds

Here are a few tips for investing in target date funds:

• Start investing early. The sooner you start investing, the more time your money has to grow.
• Invest regularly. Make regular contributions to your target date fund, even if it's just a small amount.
• Don't panic during market downturns. It's important to remember that market downturns are a normal part of investing. Don't panic and sell your investments during a downturn.
• Rebalance your portfolio regularly. As you get closer to retirement, you should rebalance your portfolio to make sure it's still aligned with your risk tolerance.

Target Date Funds: A Smart Choice for Your Retirement

Target date funds are a smart and easy way to invest for retirement. They offer a simple, diversified, and low-cost solution that can help you reach your financial goals.

Additional Resources

• Fidelity Target Date Funds
• Target Date Funds: A Guide for Retirement Investors
• Target Date Funds: The Ultimate Guide