Target-date funds are a popular retirement investment strategy, but there is a lot of confusion about how they work. This article will help clear up some of the basics and help you decide if target-date funds are right for you.

Target-date funds: Target-date funds are a type of mutual fund or ETF that invests in a mix of stocks, bonds, and other assets. The asset allocation of the fund changes over time, becoming more conservative as you get closer to your retirement date. This is designed to help you reduce your risk of losing money as you approach retirement.

Are target-date funds right for you? Target-date funds are a good option for investors who want a simple and hands-off approach to retirement investing. They are also a good option for investors who are not sure how to choose their own investments.

However, target-date funds are not for everyone. If you have a complex financial situation or if you want more control over your investments, you may want to consider other options.

How to use target-date funds correctly: If you decide to invest in target-date funds, it is important to choose the right fund for you. There are target-date funds with different target retirement dates, so you should choose a fund that is appropriate for your age and retirement goals.

Once you have chosen a target-date fund, you should invest regularly and hold the fund for the long term. Target-date funds are designed to be a one-stop shop for retirement investing, so you should not need to make any changes to your investment portfolio unless your circumstances change.

If you have any questions, ask and empower yourself.