◈ GLOSSARY · RETIREMENT
Target Date Fund.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
A single mutual fund that holds a mix of stock and bond index funds and automatically shifts toward bonds as the target retirement year approaches — a "glide path." You pick the year closest to your expected retirement (e.g., a 2055 fund) and forget it. The downside is one-size-fits-all asset allocation and expense ratios that vary widely; Vanguard and Fidelity index-based versions run around 0.08–0.12%, while some retail versions charge 0.50%+.
◈ IN PRACTICE
Example
A 30-year-old picks a Vanguard 2060 fund: today it's about 90% stocks / 10% bonds; by the target date it'll be roughly 50/50, and 7 years past target it lands at the firm's permanent retirement-income mix.