Lifecycle Funds

I am interested in investing in a lifecycle fund, but have heard that some of these funds hold risky investments, while others lost a lot of money for investors who were close to retiring. Where will my money be invested in the TIAA-CREF Lifecycle Funds, and are they a safe choice for my retirement savings?

TIAA-CREF Lifecycle Funds offer a single, convenient alternative for investors who are accumulating savings leading up to and then living through retirement. The funds aim to provide investors with a high total return over time through a combination of capital appreciation and income.

Our lifecycle funds invest only in the TIAA-CREF Funds. The lifecycle funds provide diversified portfolios that adjust their asset allocation over time to help meet the objectives of investors with different investment horizons.

You choose a lifecycle fund based on what year you plan to retire. Our funds currently offer planned retirement dates ranging from 2010 to 2050, in five-year increments. For investors with 25 years or more until retirement the funds allocate 90% of money invested in equity funds, and 10% invested to fixed income funds. The allocation to equities decreases at a steady rate of about 1½% per year until the target retirement date is reached, at which point the overall allocation is split evenly between equities and fixed income. The allocation to equities continues to decline after the lifecycle fund reaches its target retirement date, ultimately reaching an allocation of 40% equity and 60% fixed income about 7 to 10 years later.

Why would our funds still hold equities for investors nearing and then living in retirement? The reason is so that investors strike a balance between the need for both current income and continued portfolio growth while in retirement. This growth will help prevent you from outliving your money in retirement.

The way we invest in all our Lifecycle Funds reflects our commitment to make money grow consistently over time. This approach includes broad diversification within and across asset classes, low costs in relation to industry peers, carefully managed risk that is appropriate to each investor’s time horizon to retirement and each individual’s ability to withstand periods of market volatility. Of course, no method of investing can ensure a profit or eliminate the risk of investment loss. You can learn more about all our funds here.

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As with all mutual funds, the principal value isn't guaranteed. Also, please note that target-date is an approximate date when investors may begin withdrawing from the fund. Target-date funds are actively managed, so their asset allocations are subject to change and may vary from those shown.

© 2014 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017