1. You Can Choose One Fund for a Well-Diversified Retirement Portfolio.
[Note to financial professional: Please refer to slide.]
Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group which receives fees for managing, distributing and/or servicing its investments.
Investments are not FDIC- insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
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2. Meet Emma and her family.
Like many of you, Emma has a full life. She has so many responsibilities that she sometimes has a hard time fitting everything into her day.
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3. Emma Has Many Daily Responsibilities
Family
She has two young children …
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4. Emma Has Many Daily Responsibilities
Family
Career
…works full time outside the home…
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5. Emma Has Many Daily Responsibilities
Family
Career
…has a household to maintain…
Household
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6. Emma Has Many Daily Responsibilities
Family
Career
…and has to budget and save for her retirement, too. Most of the time she feels like there just aren’t enough hours in the day.
Any of you feel this way? These days, it’s easy to feel overextended. Time is at a premium.
Household
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7. Emma’s Looking for Ways to Save Time
Family
Career
Lately, Emma has been finding ways to simplify her life.
She’s joined a soccer vanpool …
Household
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8. Emma’s Looking for Ways to Save Time
Family
Career
…is delegating more responsibility to her team at work …
Household
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9. Emma’s Looking for Ways to Save Time
Family
Career
…and has asked her family to pitch in around the house.
Household
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10. ? Emma’s Looking for Ways to Save Time Family Career Household
But what about Emma’s retirement saving? How can she carve time out of her already busy schedule to put together an effective investment portfolio?
I’d like to talk to you today about how she dealt with this challenge.
Household ?
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11. ultimate sophistication.” – Leonardo da Vinci
“Simplicity is the
ultimate sophistication.” – Leonardo da Vinci
If you, like Emma, are looking for simplicity in your life, it’s not a sign of weakness. In fact, it’s quite the opposite.
[Note to financial professional: Read quote on slide.]
Great minds have always been searching for more efficient ways to do things.
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12. Emma Needs Help … Building an appropriate investment mix.
Adjusting it over time.
Finding opportunities to achieve good results without a huge time commitment.
When it comes to building and monitoring her own retirement portfolio, Emma has found the task to be less than simple.
She wants to:
build a diversified portfolio without making a huge time commitment.
adjust her mix of investments over time.
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13. Target Date Funds Simplify Retirement Investing
Then Consider Choosing This Fund
Step 2: And You Plan to Retire (or have retired) in
Step 1: If You Were Born in
1993 or later
2058 or later
2060
1988–1992
2053–2057
2055
1983–1987
2048–2052
2050
1978–1982
2043–2047
2045
1973–1977
2038–2042
2040
1968–1972
2033–2037
2035
1963–1967
2028–2032
2030
1958–1962
2023–2027
2025
1953 or earlier
2018 or earlier
2020
To accomplish her goals she can choose a target date fund.
With target date funds, all Emma needs to know is the age at which she plans to retire. She can then select the fund with the closest “target date” — the year in which an investor is assumed to retire and begin taking withdrawals.
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14. Target Date Funds Simplify Retirement Investing
Then Consider Choosing This Fund
Step 2: And You Plan to Retire (or have retired) in
Step 1: If You Were Born in
1993 or later
2058 or later
2060
1988–1992
2053–2057
2055
1983–1987
2048–2052
2050
1978–1982
2043–2047
2045
1973–1977
2038–2042
2040
1968–1972
2033–2037
2035
1963–1967
2028–2032
2030
1958–1962
2023–2027
2025
1953 or earlier
2018 or earlier
2020
Emma is 47 years old, and plans to retire at age 65.
So, for Emma, a 2035 target date fund may be appropriate.
One fund. Emma’s fund selection process is over. It’s that simple.
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15. One Investment?
Now you may be thinking, “I don’t know about this ‘one investment’ idea…I’ve heard that I need to spread my money around in different investments…”
You may have even tried to construct a diversified portfolio on your own. Trying to create a complementary mix of investments can be challenging.
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16. Target Date Funds Simplify Retirement Investing
When you invest in a target date fund:
Each target date fund serves as a single diversified portfolio made up of a broad range of investments, which can help reduce volatility when saving for retirement.
Experienced investment professionals manage the fund’s assets.
Target date funds are a convenient choice for investors who don’t have the time to put together their own investment mix.
But let’s take a look at what you’re really getting with a target date investment.
Each target date fund serves as a single diversified portfolio made up of a broad range of investments, which can help reduce volatility when saving for retirement.
Experienced investment professionals manage the fund’s assets.
Target date funds are a convenient choice for investors who don’t have the time to put together their own investment mix.
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17. Emma’s Needs Have Changed Over Time
Now, you may be thinking. “What works for me today may not be right for me down the road — some things need to change over time.”
For example, Emma’s transportation needs have certainly evolved over the years…
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18. Emma’s Needs Have Changed Over Time
[Build to reveal next vehicle.]
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19. Emma’s Needs Have Changed Over Time
[Build to reveal third vehicle.]
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20. Asset Mix (% of Equities)
Emma’s Needs Have Changed Over Time
Investment Goals Change as You Near Retirement
Asset Mix (% of Equities)
Investment Stages
45 (Years)
Retirement
–30
Transition
Distribution
Accumulation
Grow
Balance
Sustain
…and she recognizes that her investment mix also needs to change as she gets closer to retirement.
But she's not sure how and when to adjust her investment portfolio.
Luckily, target date funds adjust for you. Investment professionals manage each target date fund’s portfolio, moving it from a more growth-oriented focus to a more income-oriented focus as the fund gets closer to its target date. Some target date funds will continue to be managed professionally years beyond the projected target retirement date, so participants can remain invested in the funds throughout their retirement years.
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21. An Online Calculator Is Available for You
americanfundsretirement.com
Because her target date investment offers Emma a complete and diversified retirement portfolio in a single fund, all she really needs to do now is decide how much to save.
She uses a retirement calculator and decides to set aside a small amount from each paycheck and then change her contribution in small increments each year.
She also plans to check in with her plan’s financial professional regularly to verify that she’s on track to reach her retirement goals.
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22. Emma’s decision to use a target date fund allows her to focus more on other areas of life, like spending time with her family. By discussing her overall savings with her financial professional periodically, she’s confident she can work toward achieving her goal of a financially secure retirement.
A target date fund may be a good choice to consider if you want a simple approach to investing that’s designed with a target retirement date in mind. Do remember that although the target date funds are managed for investors on a projected retirement date time frame, the funds’ allocation approach does not guarantee that investors’ retirement goals will be met.
I hope Emma’s story has helped you better understand the benefits a target date fund offers. As always, if you have questions about today’s presentation or if you need help with retirement planning, please contact me. I’m happy to help.
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23. Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
[Note to financial professional: Refer to slide. Give your audience time to read important disclosure.]
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24. [Note to financial professional: Thank employees for attending and let them know how to get in touch with you if they need further assistance.]
© 2017 American Funds Distributors, Inc.