A news release said the Retirement 2045 Fund is designed for investors who expect to retire around that year. The fund’s current targeted asset allocation is comprised of 93% stocks and 7% bonds.
The announcement said that the lifecycle funds are structured as funds of funds investing in up to 12 other T. Rowe Price mutual funds. Their asset allocation strategies are designed for investors depending on their time horizon to retirement (See Simplicity Sells ). They emphasize growth during the early phases of retirement asset accumulation and become more conservative both as the retirement date approaches and during retirement.
“Most investors who are planning for their retirement know that asset allocation is integral to a successful investment strategy, and the Retirement Funds provide broad diversification,” said Ned Notzon, chairman of the Investment Advisory Committee that oversees the T. Rowe Price Retirement Funds, in the news release. “These funds are also appealing because they simplify retirement investing. The investor does not have to worry about managing the asset allocation strategy over time and making tactical adjustments in response to changing market conditions.”