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Retirement Corner

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Lifecycle Funds: An “Easy" Button for Retirement Planning

Planning for retirement can seem like an overwhelming process. You have to choose which of the two UTSaver voluntary retirement savings plans to participate in (if not both). You have to choose which of the five authorized providers you wish to invest with. And after that, a daunting task remains: choosing how to actually invest your money.

The UT Retirement Program offers a host of authorized company representatives who would be happy to sit down with you to discuss your investment options, risk tolerances, and long-term retirement goals. However, since not everyone is comfortable working with advisors, the UT Retirement Program also has an "easy" button available: Lifecycle Funds.

A Lifecycle Fund is an age-appropriate, diversified mutual fund where the asset allocation (such as stock-oriented or bond-oriented mutual funds) within the fund is automatically adjusted over time to become more conservative as retirement nears, and continues to become more conservative during retirement. It is sometimes called a “target-date” fund, since you choose the fund that most closely matches your retirement date (the “target-date”). Lifecycle Funds are managed by a professional investment team which aims for a high total return over time while maintaining a diversified, risk-managed exposure across a wide range of asset classes.

Because a Lifecycle Fund is “fund of funds”, the only choice you have to make is when you want to retire. If you will be reaching retirement age around 2030, then you could select a 2030 Lifecycle Fund in which to invest your contributions. The money would be invested in a portfolio of equity, bond, and money market mutual funds that automatically grows more conservative as you approach your projected retirement date.

For those UT employees who know for sure they wish to save but are not comfortable working with a financial advisor or with selecting their own portfolio, the Lifecycle Funds provide an easy, one-step alternative for their investment needs.

To learn more about your fund options within the UTSaver plans or to enroll, please visit our website at: www.utretirement.utsystem.edu.