The U.S. Department of Labor has posted an investor bulletin that explains target-date retirement fund basics.
The bulletin is aimed at investors and retirement plan participants, Labor Department officials say.
The department developed the bulletin together with the U.S. Securities and Exchange Commission.
In the bulletin, officials recommend that plan participants consider their investment style when evaluating target-date fund options, and that they read the fund prospectus to understand how managers will invest the fund assets.
“Understand how the investments will change over time,” officials write in the bulletin. “Are you comfortable with the fund’s investment mix over time? In particular, make sure you understand when the fund will reach its most conservative investment mix and whether that will occur at or after the target date.”