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What Are the Best Target-Retirement Date Funds?

Target-Retirement date funds (otherwise known as life-cycle funds) are an easy option, best if you have limited funds ($10,000 or less) or a real aversion to dealing with your investments. Like the Vanguard STAR Fund, these funds give you the whole ball of wax. Bonds, stocks, and sometimes commodities are all rolled up into one simple fund.

Unlike the STAR Fund, which has a static mix of stocks and bonds, life-cycle funds move you over the years from very aggressive to very conservative, depending on your chosen retirement date.

If you are a typical 30-year-old, or a typical 50-year-old, then a target-retirement date fund may be fine for you. Some of the better ones really aren’t bad choices — provided you are typical, with a typical amount of money, a typical projected retirement date, a typical need for return, and a typical stomach for risk.

As not everyone is “typical,” these funds aren’t for everyone. They also tend to be a bit more expensive than many other options. Nonetheless, if you think you fit the bill, consider one of the following lineups of funds.

Note that not only are some pricier than others, but also one lineup can be considerably more aggressive than another.

Fidelity Freedom Index (2020, 2025, 2030, and so on)

Contact: 800-544-8888; Fidelity

Average expense ratio: 0.20 percent

Percent in fixed income for those planning to retire in 10 more years: 50 percent

Minimum investment: $2,500 ($500 for IRA)

iShares S&P Target Date (2020, 2025, 2030, and so on)

Contact: 800-474-2737; iShares

Average expense ratio: 0.30 percent

Percent in fixed income for those planning to retire in 10 more years: 35 percent

Minimum investment: None

T. Rowe Price Retirement (2020, 2025, 2030, and so on)

Contact: 800-683-5660; T. Rowe Price

Average expense ratio: 0.75 percent

Percent in fixed income for those planning to retire in 10 more years: 30 percent

Minimum investment: $2,500 ($1,000 for IRA)

Vanguard Target Retirement Funds (2020, 2025, 2030, and so on)

Contact: 800-662-7447; Vanguard

Average expense ratio: 0.17 percent

Percent in fixed income for those planning to retire in 10 more years: 35 percent

Minimum investment: $1,000

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