Target-Date Fund

A mutual fund or ETF that automatically gets more conservative as a chosen date, usually your retirement year, approaches.

You pick the fund with the year in its name (Target 2045, say), and the fund does the rest: heavy on stocks when the date is far off, steadily shifting toward bonds and cash as it nears. The shifting recipe is called a “glide path,” which is exactly the aviation metaphor it sounds like. You want to be descending gently when you touch down, not still climbing.

Think of it as the crockpot of retirement investing. You put everything in at the start, you don’t lift the lid, and it’s supposed to be ready when you are.

Two footnotes worth reading. First, “target date” is not a guarantee date. These funds lost real money in 2008, and plenty of 2010-dated funds were still holding substantial equity when 2010 arrived. Second, glide paths vary meaningfully among fund families, so two funds with the same year on the label can hold very different things.

Set it and forget it, mostly. Just check the lid occasionally.