» Dictionary of Mutual Fund Terms » Lifecycle Funds

Lifecycle Funds

Lifecycle Funds: A balanced mutual fund, which is intended to increase its degree of conservatism as the investor retirement approaches. This is accomplished by the transference from equity to fixed-income mutual funds.

Lifecycle funds represent funds of funds that are usually offered by large companies. Lifecycle funds may be concentrated on the risk tolerance, which can vary from aggressive, moderate to conservative. Additionally, they can be tied to a particular date at which the investor will retire.

Alternative names - life cycle funds, target retirement funds, target risk funds, target date funds

For instance Jack considered the possibility of transferring the money from his 401 (k) plan to the T. Rowe Price's Retirement 2020 fund, since he was 10 years away from retirement.

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