How the Pros Manage Your Money in Retirement

Target date funds offer a diversified portfolio designed for individuals who need their money for a specific retirement year - but how do they manage your cash after retirement?

Jeff Holt 28 July, 2015 | 11:35AM
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Target date funds help ensure that investors are kept on an appropriate path as their needs change through time. The concept is straightforward: Offer a suite of funds designed for individuals who need their money, usually for retirement, at or near a specific year in the future, and then offer a diversified portfolio that changes its asset allocation over time to become more conservative as the "target-date" approaches.

Target date funds may not address investors' unique retirement circumstances, but do-it-yourself investors may learn a thing or two by studying the moves of professionals.

Target date fund managers are tasked with designing a single, diversified strategy for investors who do not wish to make asset-allocation decisions. The managers proactively shift a fund's asset mix over time to address different phases of an investor's life cycle, including the retirement phase.      

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About Author

Jeff Holt  is a Fund Analyst for Morningstar US