economy
Investors hold $4.8 trillion in these retirement funds—how to choose one for yourself
Target-date funds are a popular option for retirement investors, but pros say you need to look under the hood before investing.
TL;DR
- Target-date funds have grown to $4.8 trillion in assets, increasing by 11.9% annually over the last five years.
- Average expense ratios have decreased to 0.27% in 2025 from 0.55% in 2015.
- Funds are becoming more aggressive, with higher stock allocations for longer periods.
- Key factors for selection include underlying investments (index vs. actively managed), stock/bond split, and geographic allocation.
- The 'glide path' dictates how the fund's asset mix becomes more conservative as retirement approaches.
- Expense ratios significantly impact net returns; a lower fee can lead to substantially more money over time.
- Financial professionals recommend examining these factors, especially when investing through individual accounts.