Target-date funds are common defaults in 401(k) plans. You pick the fund named for your retirement year (e.g. 'Target Retirement 2050') and it handles asset allocation and rebalancing for you.
They're a legitimately great choice for hands-off investors. Watch the underlying expense ratio (aim for under 0.15%) and the glide path (some are more aggressive than others).
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Open Financial OS →Frequently asked questions
Can I use a target-date fund outside retirement accounts?
You can, but they're less tax-efficient in taxable accounts due to internal rebalancing. Better fits inside IRAs and 401(k)s.
Related terms
Asset allocation
How you split your portfolio across broad asset classes — stocks, bonds, cash, and alternatives.
Rebalancing
Adjusting a portfolio back toward its target asset allocation.
401(k)
A US employer-sponsored retirement plan with tax advantages.
IRA (individual retirement account)
A US tax-advantaged retirement account you open on your own, separate from an employer plan.