Target Retirement Funds: Are They for You?


This content is provided courtesy of USAA.

By Joseph Montanaro, USAA Certified Financial Planner® Practitioner

U.S. investors had more than $300 billion invested in target retirement date funds as of the end of the third quarter last year, according to the Investment Company Institute. With that type of participation, you'd think the funds would be better understood, but unfortunately, that's not the case.

All things considered, I think this type of investment can be an excellent choice for investors who are unwilling, unable or uninterested in spending a significant amount of time managing their investment portfolio. Note that I'm not saying these investments don't require time and attention — just not an extreme amount.


Any fund is just an investment tool and not a cure-all. You still have to figure out how much you need to save to meet your goals, monitor your overall portfolio and progress towards those goals, as well as set aside money for your short-term needs. But, if you're looking for a convenient way to invest for retirement, a target date retirement fund may be worth considering.


Consider the investment objectives, risks, charges and expenses of the USAA mutual funds carefully before investing. Download a prospectus containing this and other information about the funds from USAA Investment Management Company, Distributor. Read it carefully before investing.

Diversification and rebalancing does not protect against losses or guarantee that an investor's goal will be met.

This material is for informational purposes. Consider your own financial circumstances carefully before making a decision and consult with your tax, legal or estate planning professional.

Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER® in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

The risks of the Target Retirement Funds reflect the risks of the underlying funds in which the Funds invest. The target date is the approximate date when investors plan to start withdrawing their money for retirement purposes. In general, the Target Retirement Funds' investment program assumes funds will start being withdrawn for retirement purposes at age 65. The principal value of the Target Retirement Funds is not guaranteed at any time, including at the target date. The Funds' objectives do not change over time.

Investments provided by USAA Investment Management Company and USAA Financial Advisors Inc., both registered broker dealers.

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