This refers to a retirement investment strategy designed for individuals planning to retire around the year 2055. It involves a diversified portfolio of stocks, bonds, and other asset classes, automatically adjusted over time to become more conservative as the target retirement date approaches. The portfolio typically starts with a higher allocation to growth-oriented investments like stocks and gradually shifts towards more stable investments like bonds to reduce risk as retirement nears.
Such a strategy offers potential advantages for investors by simplifying retirement planning and managing investment risk. By providing a pre-determined asset allocation glide path, it eliminates the need for investors to constantly monitor and adjust their portfolios. This automated approach aims to help investors potentially achieve long-term growth early on while mitigating market volatility closer to retirement. The specific asset mix and glide path are designed based on market conditions and long-term investment principles, historically reflecting evolving investment theories and risk management practices.
