Target-Date Fund

A fund that automatically shifts from stocks toward bonds as your retirement year approaches.

A target-date fund is a set-and-forget portfolio labeled with a year — say, 2055 — that starts stock-heavy and automatically grows more conservative along a 'glide path' as the date nears. One fund provides diversification, rebalancing, and age-appropriate risk without any decisions from the saver. Since a 2006 law let employers use them as the default in 401(k) plans, they've become the largest single destination for American retirement contributions — most new 401(k) dollars now land in one.

Her entire 401(k) sits in a 2060 target-date fund that will dial down its stock allocation as she ages.