Target-date funds are mutual funds or exchange-traded funds (ETFs) that help grow assets in a way that is optimized for a specific time frame.
The structuring of these funds addresses an investor’s capital needs at some future date—hence, the name “target date.”
Most often, investors will use a target-date fund to apply to their onset of retirement.
However, target-date funds are more frequently being used by investors working towards a future expense, such as retirement, or a child’s college tuition.
In this video, Jack Bogle talked about Vanguard’s target-date retirement funds. He suggested a big advantage of the Vanguard target-date funds is low cost.
Compared with other funds, the cost of Vanguard funds is only a fraction. He reminded people to always pay attention to the cost of their funds.
John Clifton “Jack” Bogle (May 8, 1929 – January 16, 2019) was an American investor, business magnate, and philanthropist. He was the founder and chief executive of The Vanguard Group, and is credited with creating the first index fund.
