What this calculator shows you
- Find Your Fund
- The target year that matches your retirement age
- The Glide Path
- Stocks vs. bonds at every age
- Fee Check
- What a higher expense ratio costs by retirement
- Honest Check
- Rerun at 6% stocks and 3% bonds
What a Target-Date Fund Is
A target-date fund is one fund that holds a whole portfolio: U.S. stocks, international stocks, and bonds. You pick the fund named for the year you plan to retire, and it handles the mix for you, rebalancing along the way. It is the default investment in many 401(k) plans.
The Glide Path
The fund starts with mostly stocks while retirement is far away, then shifts toward bonds as the target year gets closer. That schedule is called the glide path. Vanguard's, for example, holds about 90% stocks until roughly 25 years before the target date, about 50% at the target date, and about 30% seven years after. Other fund families use different paths, so two "2060" funds can hold quite different mixes.
Picking the Right Year
Funds come in five-year steps. Take the year you turn your retirement age and round to the nearest five. If you want more stocks for longer, a later year works; if you want to be more careful, an earlier one does. Either way, a target-date fund is meant to be your whole portfolio: holding it next to other stock funds changes the mix it was built to manage.
Why the Fee Matters
Index-based target-date funds can cost under 0.10% a year, while some actively managed ones charge more than 0.50%. Because the fee comes out of your balance every year, a small difference compounds into a large one over a career. The calculator shows exactly how much on your numbers.
Questions people ask
Are target-date funds a good idea?
For many people, yes: one low-cost fund, automatically diversified and rebalanced. The trade-offs are less control, a mix that may be more cautious (or more aggressive) than you want, and fees that vary widely between fund families.
What happens when I reach the target year?
The fund keeps going. It continues shifting toward bonds for several years, then holds a steady, more conservative mix. You don't have to sell it when you retire.
Should I hold a target-date fund in a taxable account?
It can be less tax-efficient there, because the bonds and the fund's own rebalancing can create taxable income. Many people keep target-date funds in 401(k)s and IRAs.
Education only, not personalized financial, tax or investment advice. Results are estimates based on the numbers you enter; real returns vary and losses happen.