Best Retirement Funds – Consider target date retirement funds for your old age
Target date retirement funds have been considered as the best retirement funds by most of the personal finance planners. Choosing one of more of these target date retirement funds is the best option for people who do not want to spend time and effort in tracking the market and keep adjusting their portfolio.
Most people do not have the expertise and the time to track the market. It is therefore impossible for them to get the maximum out of their retirement savings. The mutual fund industry has understood this problem of public and most asset management companies have launched a number of target date retirement funds to help people.
How do these retirement funds work?
This is pretty simple. Each asset management company has launched a series of retirement funds having a specific target date. For example Vanguard has different retirement funds called Vanguard target Retirement 2010, Vanguard Target retirement 2020, 2030 and so on. Similar plans are available through other companies like T Rowe, Oppenheimer etc.
All the person has to do is to choose a plan which is nearest to his retirement age. For example, person X has his retirement age as 2018, and then he can easily choose a retirement fund which has target date of 2020. All these funds have a mix of equity and bonds depending upon the time of maturity.
If you look at the past performance of these retirement funds, Vanguard target retirement funds have performed the best of the lot. They have received the highest rating from Morning Star. Their fees are also less compared to other fund houses. Other competitor of vanguard which has performed well is T Rowe. The results of Oppenheimer have been the worst during past 1 year due to which it got the lowest rating. On top of that, the fees are the highest for Oppenheimer.
Target-date funds can make retirement investing easier and more manageable for savers. The easiest method is to choose from one of the best retirement funds and concentrate on your work instead of worrying about your portfolio.
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- Best Index Funds – Why to invest in index funds?
- Investing in Stock Market through Mutual funds – Introduction to Mutual Funds
- Best Bond Funds – Good alternative to equity mutual funds
- Best Large Cap Mutual Funds
- Blue chip mutual funds
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