HIT YOUR GOAL WITH A TARGET-DATE FUND

Use our guide to help you choose among these popular retirement-saving options.

- BY DAVID MILSTEAD

Saving for retirement is hard.

For many, investing that money may be even harder. Target-date funds have become a nearly $5 trillion industry by largely solving that problem. The “target date” is the year of an investor’s expected retirement (but it could apply to any other long-term savings goal, such as college tuition). The funds have a heavier weighting in stocks early on, when the investor is younger and can better weather losses. They shift gradually over time to bonds, when safety becomes more important.

It’s investing on autopilot, so much so that many call the premise of the funds “set it and forget it.” That works for many holders of the funds. But target-date funds come with no guarantees. It’s important to choose the right fund for you and to determine where it fits in your portfolio. It can be an all-in-one diversified solution to a savings challenge, a core around which you layer other holdings or just one of many investments. As with any fund, it’s also important to check in periodically to see how well it still fits.

Failing to do so may cause you to veer off course—a serious risk for retirement savers. “The negative thing with the target-date funds is that they don’t know your life,” says Mark Wilson, founder of MILE Wealth Management in Irvine, Calif.

Whatever the weaknesses, target-date funds’ growth has been explosive: The market increased 20% in 2025 to $4.8 trillion, according to research firm Morningstar. Assets held by target-date funds, both inside and outside of workplace retirement plans, have grown 11.9% per year for a decade. A large part of that is performance, in addition to popularity. With bonds in the mix, they won't keep up with stocks in a bull market, but most target-date fund holders saw double-digit returns in 2025, Morningstar reports.