Why Consider This Fund
- You want the opportunity to remain in the same portfolio after the target date is reached
- You want one-step diversification with exposure to domestic stocks, international stocks and fixed-income securities
- You’ve considered your risk tolerance and want your asset allocation to become more conservative over time, but still provide growth after your retirement date to protect against longevity risk
- You want an actively managed asset allocation portfolio investing in actively managed underlying funds
How We Approach Editorial Content
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investors point of view. We also respect individual opinionsthey represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.
Investment Objective And Policies
Depending on the proximity to its target date, the fund will seek to achieve the following objectives to varying degrees: growth, income and conservation of capital. The fund will increasingly emphasize income and conservation of capital by investing a greater portion of its assets in bond, equity-income and balanced funds as it approaches and passes its target date. In this way, the fund seeks to balance total return and stability over time.
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American Funds 2050 Target Date Retirement Fund Vs S& p Target Date 2050 Index
For younger participants focused on long-term growth, our 2050 vintage has delivered an average annual excess return of 1.47%.
Scenario philosophy:This simulation approximates the experience of an early-career participant who invested in the Series at its inception in February 2007 and expects to retire in 2050.
Assumptions:Salary: $40,000 per year initially growing by 3% annually. Contribution rate: 10% annual contribution starting February 1, 2007.
AFTD excess return is calculated as the difference in return between the American Funds 2050 Target Date Retirement Fund and S& P Target Date 2050 Index. Returns are time-weighted . Market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. There have been periods when the fund has lagged the index.
The American Funds 2050 Target Date Retirement Fund is managed as a through retirement fund. For a comparison to a broader universe, we compare the American Fund to the S& P Target Date 2050 Index which includes target date funds managed both to and through retirement. Over the same period, the S& P Target Date 2050 Through Index had an average annual return of 7.82% and the American Fund had a total excess return of 1.15%. For additional American Fund results compared to its benchmark, .
How We Use Your Personal Data
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
- Verify your identity, personalize the content you receive, or create and administer your account.
- Provide specific products and services to you, such as portfolio management or data aggregation.
- Develop and improve features of our offerings.
To learn more about how we handle and protect your data, visit our privacy center.
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How American Funds Target Date Retirement Portfolios Work
American Funds Target Date Retirement Portfolios, a Target Date asset allocation option, are designed to take you through retirement.
The asset mix of each Portfolio is based on a target date. This is the expected year in which participants in a Portfolio plan to retire and no longer make contributions. A team of asset allocation professionals adjusts each Portfolios make-up over time to ensure a noticeable and steady shift from equities to fixed income in the years leading to retirement.
The American Funds Target Date Retirement Portfolios are composed of actively managed funds and are managed to help retain your potential for growth, and aim to preserve the value of your assets at and after retirement.
As each Portfolio glides over time, its asset mix is adjusted. Looking at the image below:
- Designed to take you through retirement
- Portfolios maintain meaningful equity exposure to help you manage the risk of outliving your savings
- Each funds investment allocation gradually transitions from a growth-oriented approach to a more income-oriented focus as the fund approaches and passes its target retirement date.
Morningstar Category Percentile Sharpe Ratio Rankings
*Sharpe ratio uses standard deviation and return to determine the reward per unit of risk. The higher the ratio, the better the portfolio’s historical risk-adjusted performance.
Sharpe ratio rankings calculated by Capital Group based on data obtained from Morningstar. Except for 10-year periods, Sharpe ratio figures were calculated by Morningstar. 10-year Sharpe ratios were calculated by Capital Group based on data obtained from Morningstar. Sharpe ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the portfolios historical risk-adjusted performance.
All funds began on February 1, 2007, except for the 2055 fund, which began on February 1, 2010 the 2060 fund, which began on March 27, 2015 and the 2065 fund, which began on March 27, 2020. Rankings are based on the funds average annual total returns and volatility within the applicable Morningstar categories. The rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. The Morningstar category average includes all share classes for the funds in the category. While American Funds R-6 shares do not include fees for advisor compensation and service provider payments, the share classes represented in the Morningstar category have varying fee structures and can include these and other fees and charges resulting in higher expenses.
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How We Make Money
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
American Funds 2030 Target Date Retirement Fund Vs S& p Target Date 2030 Index
For those in transition, our 2030 vintage has delivered an impressive 1.31% in average annual excess return.
Scenario philosophy:This simulation approximates the experience of a mid-career participant who invested in the Series at its inception in February 2007 and expects to retire in 2030.
Assumptions:Salary: $65,000 per year initially growing by 3% annually.Initial investment: $150,000 on February 1, 2007.Contribution rate: 10% annual contribution starting February 1, 2007.
AFTD excess return is calculated as the difference in return between the American Funds 2030 Target Date Retirement Fund and S& P Target Date 2030 Index. Returns are time-weighted . Market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. There have been periods when the fund has lagged the index.
The American Funds 2030 Target Date Retirement Fund is managed as a through retirement fund. For a comparison to a broader universe, we compare the American Fund to the S& P Target Date 2030 Index which includes target date funds managed both to and through retirement. Over the same period, the S& P Target Date 2030 Through Index had an average annual return of 7.03% and the American Fund had a total excess return of 0.88%. For additional American Fund results compared to its benchmark, .
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American Funds 2010 Target Date Retirement Fund Vs S& p Target Date 2010 Index
For those in retirement, our 2010 vintage has delivered an average annual excess return of 0.52%.
Scenario philosophy:This simulation approximates the experience of a late-career participant who invested in the Series at its inception in February 2007 before retiring in 2010.
Assumptions:Salary: $100,000 per year initially growing by 3% annually until retirement on January 1, 2010.Initial investment: $800,000 on February 1, 2007.Contribution rate: 10% annual contribution starting February 1, 2007 until retirement on January 1, 2010.Withdrawal rate: 4% withdrawal of $800,000 increasing by 2% per year.
AFTD excess return is calculated as the difference in return between the American Funds 2010 Target Date Retirement Fund and S& P Target Date 2010 Index. Returns are time-weighted . Market indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index. There have been periods when the fund has lagged the index.
The American Funds 2010 Target Date Retirement Fund is managed as a through retirement fund. For a comparison to a broader universe, we compare the American Fund to the S& P Target Date 2010 Index which includes target date funds managed both to and through retirement. Over the same period, the S& P Target Date 2010 Through Index had an average annual return of 5.64% and the American Fund had a total excess return of 0.06%. For additional American Fund results compared to its benchmark, .
Seeking To Build And Preserve Wealth
Our Series adapts to changing participant needs by adjusting both its stock/bond mix and the types of assets held through each stage of life.
Our Series adapts to changing participant needs by adjusting both its stock/bond mix and the types of assets held through each stage of life.
Early career
Seek to grow wealth and manage risk with predominantly growth-oriented equities and a prudent allocation to defensive bonds.
American Funds Target Date Retirement Series glide path approximation
Mid-career
Begin to balance growth and income via diversified fixed income and dividend-paying equities.
American Funds Target Date Retirement Series glide path approximation
In retirement
Seek to preserve wealth and deliver sustainable income with less-volatile dividend-paying equities and higher quality bonds.
American Funds Target Date Retirement Series glide path approximation
The target allocations shown are as December 31, 2021, and are subject to the oversight committees discretion. The investment adviser anticipates assets will be invested within a range that deviates no more than 10% above or below the allocations shown in the prospectus. Underlying funds may be added or removed during the year. Visit capitalgroup.com for current allocations.
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Morningstar Category Percentile Return Rankings
All funds began on February 1, 2007, except for the 2055 fund, which began on February 1, 2010 the 2060 fund, which began on March 27, 2015 and the 2065 fund, which began on March 27, 2020. Rankings are based on the funds average annual total returns within the applicable Morningstar categories. The rankings do not reflect the effects of sales charges, account fees or taxes. Past results are not predictive of results in future periods. The Morningstar category average includes all share classes for the funds in the category. While American Funds R-6 shares do not include fees for advisor compensation and service provider payments, the share classes represented in the Morningstar category have varying fee structures and can include these and other fees and charges resulting in higher expenses and lower returns.
For a list of each fund’s Morningstar category, please see the “Morningstar categories” section. The category includes active, passive and hybrid target date funds, as well as those that are managed both “to” and “through retirement. Approximately one-third of the funds within the 2000-2010 category have a target date of 2005. In an effort to manage the risk of investors outliving their savings while managing volatility, our approach to allocating between stocks and bonds puts more emphasis on stocks than some other target date funds.
Transparency Is Our Policy Learn How It Impacts Everything We Do
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
Wed like to share more about how we work and what drives our day-to-day business.
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