Financial Fitness

What is a Target Date Fund (TDF)?

March 2020 

A target-date fund (TDF) is an investment option offered within most retirement savings plans (401k, 457, 403b, IRAs). It allows you to simply choose a TDF for the year you intend to retire or begin taking retirement income. The fund will automatically adjust your investments over the years to get more fiscally conservative as you get closer to your retirement date.
For many workers looking for a straightforward and relatively hands-off way to ensure their investments are diversified properly, this type of fund can be a good choice. But no investment is 100 percent hands-off, so it's still wise to keep an eye on your goals and make adjustments to your retirement fund when necessary. If you end up retiring sooner than expected (perhaps due to unexpected health issues or a job loss), your original TDF may no longer be appropriate. 

Even if you're saving consistently for retirement, your money may not go as far as you think it will if you're not investing in the right places. By making sure your assets are allocated well and your portfolio contains just the right amount of risk versus reward, you can ensure you're making the most of every dollar.

Target date funds are available in the State of Iowa Retirement Investors’ Club retirement savings benefit. If you want to discuss investment options, schedule a time to meet with a financial advisor. RIC advisor assistance comes at no cost and can help ensure you are making informed decisions about your investment choices.