Target Date Funds: Are They the Laziest and Best Investment Strategy?
By Marcus Cole8 min readUpdated June 29, 2026
Most people don't want to be an investor; they want to retire. Target date funds are built for that exact person — one fund that adjusts itself over decades. Nobody taught us this. Let me fix that.
What a target date fund is
A target date fund is a diversified mutual fund tied to an approximate retirement year, like 'Target Date 2055.' It holds a mix of stocks and bonds that shifts over time toward a more conservative allocation as the date approaches.
Why beginners like them
You make one decision — your approximate retirement year — and the fund handles diversification and rebalancing automatically. There is no portfolio to manage.
How the 'glidepath' works
Early in your career the fund typically holds more stocks. As you near retirement, it shifts toward more bonds. Each fund family designs its glidepath differently.
Where target date funds can fall short
They are not customized to your exact situation. Two people retiring the same year can have very different risk tolerances and other assets. Fees and glidepath aggressiveness vary by provider.
Who target date funds tend to fit
Beginners who want a hands-off retirement strategy, people whose workplace plan offers a good one, and investors who would otherwise tinker too much.
Key facts
- One fund handles diversification and rebalancing.
- Fees and glidepaths vary across providers — read the fund documents.
- Future returns are not guaranteed.
Step-by-step
1. Estimate your retirement year
Round to the nearest 5-year increment.
2. Find the matching target date fund
In your workplace plan or brokerage.
3. Check the expense ratio and glidepath
Lower fees are usually better; glidepath should match your risk tolerance.
4. Automate contributions
And let the fund do the rest.
5. Resist the urge to add 5 other funds
Stacking funds defeats the purpose.
Practical example
A 30-year-old picks a target date fund roughly aligned with their planned retirement year, contributes monthly through their workplace plan, and ignores it for the next 30 years. The simplicity is the point.
Common mistakes to avoid
- Buying a target date fund and adding three other funds 'just in case.'
- Ignoring the fund's expense ratio.
- Picking a much later target date for a 'more aggressive' fund without understanding the trade-offs.
- Switching funds every time markets move.
Frequently asked questions
Can I beat a target date fund with my own portfolio?
Maybe. But most investors don't, and a target date fund you actually stick with is better than a custom portfolio you abandon.
What if I want to retire earlier or later?
Pick a target year closer to your actual plan, not just your current age.
Are they only for retirement?
They are designed for retirement, but conceptually similar 'all-in-one' funds exist for other goals.
Keep reading
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About Marcus Cole
Marcus is a 34-year-old financial educator who paid off $47,000 in debt and now explains money in plain language. Nobody taught us this. Let me fix that.
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