Vine
🎯
Investing foundations

Lesson 62 · Written for kid, teen, and little

Funds With a Date on Them

One fund that slowly changes its mix as your goal year gets nearer.

The idea

A target-date fund is one fund with a year in its name, like Target 2060, built for people who expect to need the money around that year. When the date is far away it usually holds mostly stocks, and as the year gets closer it gradually shifts more toward bonds and cash. That gradual shift is called a glide path, and the fund handles it instead of you rebalancing by hand. It is a convenience tool rather than a guarantee, since the value can still go up and down, and fees and glide paths differ from fund to fund. 🎯

A

Words to know

5

target date

The year in the fund's name, roughly when the money is meant to be used. A 2065 fund is built for someone retiring around then.

target-date fund

One fund that holds a mix and changes that mix as its target year gets closer. You buy it once and it adjusts for you.

glide path

The plan for how the mix slowly shifts from bolder to steadier over the years. Mostly stocks at 20, many more bonds by 60.

fund

A basket that holds many investments at once, so you own a slice of all of them. One purchase, hundreds of companies.

fee

The small amount a fund charges each year for running the basket. 0.10% of $1,000 is $1 a year.

Try it — no accountMatch the pairs

Match each term to its meaning.

0 / 4 matched

In the full lesson

  1. 1Match the pairs
  2. 2Work out the number
  3. 3Make the call

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

Free to use

The practice portfolio is open.

Start practicing

More in Investing foundations