For the average investor target date funds have become a popular auto-invest, set-it and forget-it option for retirement saving in their 401(k) plans or IRA’s. That’s actually a good thing in my mind if the investor sticks to the program. The funds include a mix of stocks and bonds that are automatically re-balanced and become more conservative as they move toward the target retirement date. Some argue they might become too conservative for retirees, but that’s a separate discussion.

What many don’t realize is there’s no “industry standard” for the asset allocation in these funds; that’s left to the fund companies. Below is a list of widely held target date 2030 funds. As you can see, they have a huge range of asset allocations ranging from 75/25 Stocks to Bonds/Cash/Short-Term down to 55/45.

Wow! To me 55/45 is awfully conservative for someone 12 years from a planned retirement.

This “risk tolerance” spread is something individual investors should be aware of, and comfortable with, particularly as they approach retirement.

Just remember, target date funds are not created equally.

• Fidelity Freedom® 2030 Fund (FFFEX) – 75.41% Stocks (domestic and int’l); 23% Bonds; 1.59% Sort-term reserves
• Fidelity Freedom® Index 2030 Fund (FXIFX) – 73.1% Stocks (domestic and int’l); 24.8% Bonds (domestic and int’l); 2.1% Cash/Other
• Vanguard Target Retirement 2030 Fund (VTHRX) – 70.28% Stocks (domestic and int’l); 29.7% Bonds(domestic and int’l); 0.02% Short-term reserves
• BlackRock LifePath Index 2030 Fund (LINKX) – 69.22% Stocks (domestic and int’l); 30.29% Bonds (domestic and int’l); 0.48 Cash/Short-term
• Schwab Target 2030 Index Fund (SWYEX) 68.35% Stocks (domestic and int’l); 27.4% Bonds (domestic and int’l); 4.25% Cash/Other
• PIMCO RealPath Blend 2030 Fund (PBPAX) – 61.69% Stocks (domestic and int’l); 36.34% Bonds (domestic and int’l); Commodities 1.95%; 0.01 Short-term
• American Century One Choice 2030 (ARCVX) 55.5% Stocks (domestic and int’l); 39.5% Bonds (domestic and int’l); 5% Cash/Money Market

Note: Fund data as of 9/19/2018