Funds With a Date on Them
One fund that slowly changes its mix as your goal year gets nearer.
The idea
A target-date fund is one fund with a year in its name, like Target 2060, built for people who expect to need the money around that year. When the date is far away it usually holds mostly stocks, and as the year gets closer it gradually shifts more toward bonds and cash. That gradual shift is called a glide path, and the fund handles it instead of you rebalancing by hand. It is a convenience tool rather than a guarantee, since the value can still go up and down, and fees and glide paths differ from fund to fund. 🎯
Words to know
- target date
- The year in the fund's name, roughly when the money is meant to be used.
- target-date fund
- One fund that holds a mix and changes that mix as its target year gets closer.
- glide path
- The plan for how the mix slowly shifts from bolder to steadier over the years.
- fund
- A basket that holds many investments at once, so you own a slice of all of them.
- fee
- The small amount a fund charges each year for running the basket.
Try it — no account needed
Match each term to its meaning.
0 / 4 matched
In the full lesson
- 1Match the pairs
- 2Work out the number
- 3Make the call
Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.
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