How target date funds help manage inflation

  • Here's a simple way to think about inflation.

    Inflation means that the dollar you have today will buy less in the future than it does now. That's a big concern if you're putting your dollars away for your retirement.

    The good news is that target date funds are designed to help you keep inflation from chipping away at your hard earned savings. And they do it for you, automatically.

    Early in your career, when you just are starting to put dollars aside for your retirement, target date funds invest in a diversified mix of stocks in seeking to help your portfolio grow faster than inflation.

    Then as you move towards retirement, your target date fund will start to get more conservative and will automatically reduce the percentage of stocks in your portfolio and increase the percentage of bonds.

    The result is a retirement portfolio that's designed to help you grow and preserve your nest egg over your long retirement.