A kind of asset allocation technique inside a portfolio designed to simplify investing for retirement. These portfolios sometimes maintain a mixture of shares, bonds, and different asset lessons, step by step turning into extra conservative because the goal retirement date approaches. As an example, a portfolio concentrating on a 2050 retirement date would possible maintain a better proportion of shares in 2024 than a portfolio concentrating on a 2030 retirement date.
This method provides a hands-off funding resolution, mechanically adjusting danger publicity over time. This automated shift permits people to concentrate on different monetary priorities with out requiring frequent portfolio rebalancing selections. Traditionally, this funding technique has gained recognition as a handy technique to take part in monetary markets whereas managing danger aligned with a long-term aim.