Target Date Capabilities

At T. Rowe Price, we believe knowing is the key to a good retirement.

We want our target date investors to feel retirement certain. Through our decades of managing target date solutions and shaping retirement futures, we have developed a distinct understanding of real-life retirement needs. By asking better questions, we aim to deliver better outcomes.

Three main principles guide our approach to target date investing:

1. We put you first: Because we understand how people tend to behave—leading up to, at the point of, and into retirement—and the impact changing markets can have on retirement over time, we factor your evolving needs into every decision we make. 
2. We are uncompromising on risk: Our people-centric approach to managing risk is focused on helping our clients meet their retirement goals.   
3. Quality and innovation are part of everything we do, as standard: We deliberately embed quality and innovation into every aspect of our target date solutions.

Because we look at the full retirement picture, our target date glide paths are designed around clients’ needs leading up to, at the point of, and into retirement and the differing retirement outcomes clients want to achieve. 

We develop our glide paths based on:

• real-world research and analytics that deliver deep insights,
• retirement saving and spending behaviors, and
• market conditions and trends over time. 

Our methodology also incorporates the full range of these attributes, rather than relying on simple averages. 

Additionally, our target date glide paths are constructed with purposeful diversification, using building blocks intentionally selected to play a specific role at different stages along the retirement journey. These building blocks are assembled so each component complements the others to work collectively to help drive better retirement outcomes. 

And our active approach means we are always looking to ensure we are meeting client needs. While we embrace the fact that retirement journeys can last decades, we are able to monitor and make pragmatic adjustments along the way in an effort to stay ahead of change.

Our people-centric approach to managing risk is focused on one thing: helping achieve retirement goals.

Because we look at the full retirement picture, we can comprehensively manage the many risks and opportunities that arise over a lifetime of investing for retirement. From market volatility to the risk of outliving retirement savings and everything in between, our holistic view means we carefully and continually plan for a range of short- and long-term factors. 

It starts with our outcome-based design, developed to address specific retirement objectives. It is further reflected in our purposeful diversification, with building blocks intentionally selected to play a specific role at different stages along a retirement journey. 

And while we embrace the fact that retirement journeys can last decades, we are able to monitor and make pragmatic adjustments along the way in an effort to stay ahead of change. That means we can stay consistently focused on what is most important: pursuing the best possible outcomes for retirement.

We are uncompromising on how we manage risk at every step along a retirement journey to help our clients feel retirement certain.

Growth is key in the early stages of a target date fund glide path to help build substantial retirement savings that can sustain investors through potentially long retirements. As retirees live longer, with rising health care costs and inflation over time, growth in the early years of a retirement journey can significantly impact the target date fund’s potential to meet an investor’s retirement needs over the long term. 

Because we are uncompromising on risk, we build these longevity risks into our glide path design to best support the needs of our clients.

We build our target date funds with highly diversified building blocks. Our deep and broad investment capabilities allow for global diversification across a range of equity and fixed income asset classes, sectors, and regions.

Each of these building blocks is purposefully selected to play a specific role in the portfolio at different stages of the retirement journey. We put those pieces together with the intention that each component complements the others and works collectively to help drive better retirement outcomes and deliver value to our clients.

While retirement journeys require a long-term focus, we also manage shorter-term risks and opportunities by making tactical adjustments to our target date solutions in an effort to stay ahead of change. 

Our approach to diversification also helps address risks and opportunities as we select the underlying building blocks to play a specific role in the portfolio at different stages of the retirement journey.

Through our unwavering commitment to delivering strong retirement outcomes in all market conditions, we help our clients to feel retirement certain.

Investors select target date funds based on their likely retirement date. 

When clients are in the early stages of their working years, the glide path emphasizes investment in equities while gradually shifting to bonds as they get older, based on an expected retirement age of 65. And they can adjust their selection based on their specific circumstances. For example, if their time horizon, risk tolerance, or financial situation calls for it, they can consider an investment with a different target retirement date. 

Yes. We offer active/passive blended target date solutions that seek to deliver the best of both worlds, combining active and passive building blocks to help clients meet their retirement goals. Our blended solutions balance the benefits of both investment styles and take a prudent approach to return generation and cost containment. Active allocations, with an eye toward delivering better returns than market indexes, provide opportunity to drive better outcomes and support lifetime income. Diversified passive allocations provide lower costs. 

By understanding the respective challenges and opportunities across both investment styles, and through purposeful selection of active and passive underlying investments, our blended solutions help deliver value to our clients.

As a leader in the target date industry, T. Rowe Price offers investment strategies and vehicles to meet evolving needs of clients. We are committed to offering investments with competitive fees across all our solutions and to delivering value for our clients. 

If you would like to discuss how our pricing compares to competitors, please contact us.