Morningstar’s Guide to Target-Date Investing

As the default option in many employer-sponsored retirement plans, target-date strategies play important roles for many. Target-date vehicles can also be good choices for investors who would like simplify their portfolios and be less hands-on with their asset mixes.

In a nutshell, target-date strategies blend stocks and bonds in a single portfolio, providing asset-class diversity in a single fund. The portfolios become less risky as they draw closer to their "target date." That target date generally corresponds to the owner’s retirement date.

In this guide, we explore how target-date portfolios work and how they differ, key factors to consider when choosing among vehicles, and how various target-date series rate based on key factors like price and investment process.

Nuts and Bolts

What Are Target-Date Funds? Investors in target-date funds can set up a diversified portfolio and maintain a sensible asset allocation for decades without breaking a sweat.

How to Choose a Target-Date Fund Expenses and glide path are just two factors that investors should consider.

In Praise of Target-Date Funds To critics of target-date funds: Are you seeing what I'm seeing?

Ratings

The Best Target-Date Funds for 2021 and Beyond Pimco joins our list of top target-date funds, and T. Rowe Price gets an upgrade.

American Funds Target Date Retirement Series This is a stalwart target-date series. BlackRock LifePath Index Target-Date Series This remains a first-class target-date series. Fidelity Freedom Index Series A thoughtful approach at a low cost makes this a strong choice for target-date investors. Pimco RealPath Blend Series This target-date series offers the best of both worlds. State Street Target Retirement Series This target-date series enjoys durable advantages.

T. Rowe Price Retirement Target-Date Series The series' cheapest share classes now earn a Morningstar Analyst Rating of Gold.

Vanguard Target Retirement The original low-cost choice is still a cut above its peers.

3 Target-Date Series for an IRA Here's why target-date funds can be excellent choices for an IRA.

Target-Date Deep Dive: Vanguard The giant's target-date series remains among the best for retirement savers.

Target-Date Deep Dive: Fidelity We unpack the differences among the firm's three target-date strategies.

Target-Date Deep Dive: T. Rowe Price The firm has one of top teams for asset-allocation research and execution in the industry.

Further Research

Are You Using Your Target-Date Fund Incorrectly? Here are some issues that can arise as well as some potential solutions.

3 Key Developments in the Target-Date Landscape Our 2021 paper reveals new trends.

Target-Date Blend Funds Getting More Popular The unique attributes of target-date blend funds are making them increasingly popular.

Is Guaranteed Income the Next Frontier for Target-Date Funds? The SECURE Act opens the door for annuities in target-date funds.

Morningstar’s 2021 Target-Date Strategy Landscape Report Our annual report uncovers the market trends and driving factors behind the growth and success of target-date strategies. Why Target-Date Funds Don’t Resemble University Endowment Funds Half the reason is legal, the other half is practical.