A target-date fund (TDF) is a mutual fund that automatically adjusts its asset allocation over time, becoming more conservative as the target date (retirement year) approaches. A 'Target 2055' fund for someone retiring in 30 years might hold 90% stocks / 10% bonds today, gliding to 50/50 by retirement. TDFs handle asset allocation, rebalancing, and the glide path automatically — ideal for hands-off investors. Vanguard, Fidelity, and Schwab offer low-cost TDFs (0.08-0.15% expense ratios); employer 401(k) menus typically default new participants into TDFs. Verify your TDF's glide path matches your risk tolerance — some are more aggressive than others.
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401(k)
A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
Alpha
Alpha is excess return relative to a benchmark, adjusted for risk (beta). Positive alpha means an investment outperformed…
Asset Allocation
Asset allocation is the percentage split of your portfolio across asset classes — typically stocks, bonds, and cash,…
Backdoor Roth
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Beta
Beta measures a stock's volatility relative to the overall market (S&P 500 = beta of 1). Stocks with…
Target-Date Fund
August 22, 2026 · Aditya Gupta
Investing
Related terms
401(k)
A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
Alpha
Alpha is excess return relative to a benchmark, adjusted for risk (beta). Positive alpha means an investment outperformed…
Asset Allocation
Asset allocation is the percentage split of your portfolio across asset classes — typically stocks, bonds, and cash,…
Backdoor Roth
The Backdoor Roth is a strategy for high earners (above the Roth IRA income limit) to contribute to…
Beta
Beta measures a stock's volatility relative to the overall market (S&P 500 = beta of 1). Stocks with…
