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Fidelity Target Date Strategies
A single, professionally managed, and diversified investment, designed to help participants target their current standard of living through a retirement that may last 25-30 years.
With nearly half of all participants holding 100% of their assets in a target date fund1, you need to feel confident that the funds you offer can help drive the outcomes you and your employees want. Understanding the goal of the target date fund glide path– or the strategy for decreasing the amount of equity in the overall investment mix over time – is an important part of that decision.
So when it comes to a target date fund’s glide path, why is an income replacement goal important?
Because it may mean the difference between employees having enough to live on through retirement – or not.
Fidelity believes the design of your target date fund’s glide path should help you achieve your workforce management goals while helping your employees achieve their desired outcomes for retirement.
That’s why our target date fund glide path is designed with an income replacement goal. Our research suggests that even with healthy savings in their working years, they still need risk-appropriate investment returns to help provide enough money for a retirement that could last 25-30 years.
Shaped by key drivers of long-term outcomes
To help support these long-term goals, Fidelity’s target date fund glide path is informed by research in three critical areas:
- Employee Analysis – Leveraging the largest recordkeeping data base in the industry* for insights into actual and anticipated investor behaviors.
- Market Insights – Analysis and modeling helps inform expectations of returns and volatility for different asset classes.
- Balance of Risk and Reward – Understanding an investors ability to handle risk helps target an asset allocation mix appropriate at every age.
Consider Fidelity’s target date strategies for your plan
To learn more about Fidelity’s target date strategies and diverse product offering, contact your Fidelity representative.
1 Fidelity recordkept data as of 12/30/2017.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
Unless otherwise disclosed to you, any investment recommendation in this document is not meant to be impartial investment advice or advice in a fiduciary capacity. Fidelity and its representatives have a financial interest in any investment alternatives or transactions described in this document. Fidelity receives compensation from Fidelity funds and products, certain third-party funds and products, and certain investment services. Fidelity may also receive compensation for services that are necessary to effect or execute transactions with respect to investment alternatives (such as trading commissions). The compensation that is received, either directly or indirectly, by Fidelity may vary based on such funds, products and services, which can create a conflict of interest for Fidelity and its representatives.
Fidelity Freedom Funds are designed for investors who anticipate retiring in or within a few years of the fund's target retirement year at or around age 65 and plan to gradually withdraw the value of their account in the fund over time. Except for the Freedom Income Fund, the funds' asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. Ultimately, they are expected to merge with the Freedom Income Fund. The investment risk of each Fidelity Freedom Fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, commodity-related, and foreign securities. Leverage can increase market exposure, magnify investment risks, and cause losses to be realized more quickly. No target date fund is considered a complete retirement program and there is no guarantee any single fund will provide sufficient retirement income at or through retirement. Principal invested is not guaranteed at any time, including at or after the funds' target dates.
Please note that our Target Date funds are not individualized and our ability to help participants meet their income replacement goals is dependent on both investment performance and participant contribution and withdrawal behavior.
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