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Target-date funds, or TDFs, were initially created to work something like time-lapse photography. Let's say you want to capture a tree's growth to maturity. Individual snapshots are automatically taken at set intervals over a long period of time. You forget about it until things come to full fruition, then lo and behold, you can play back the series of shots in rapid succession to see a sapling grow into an oak, as if 30 years were 30 seconds. Similarly, TDFs come with a promise to grow an investor's assets over time by updating "snapshots" of stock-to-bond asset allocations without the investor having to do anything. As the investor grows older, TDFs automatically rebalance away from risky equities and towards safer fixed income assets. This culminates at retirement with a portfolio that is balanced to provide retirement income without taking too much risk.
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