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Target-date fund assets hit $4.8 trillion as near-retirees face glide-path risks
Morningstar data cited by Yahoo Finance shows target-date funds reached $4.8 trillion in 2025, up more than 20% from 2024, as advisers warn the funds may shift too conservatively for investors nearing retirement.
Target-date funds have surged in scale, with assets rising to a record $4.8 trillion in 2025, more than 20% higher than the end of 2024, according to Morningstar data cited by Yahoo Finance.
The growth reflects both market appreciation and steady retirement-plan contributions, with Morningstar analyst Mahi Roy saying the industry has expanded 11.9% per year over the past decade. With many 401(k) plan sponsors and most state auto-IRA programs using target-date funds for automatic enrollment, the products are designed to automatically adjust stock and bond exposure as the target retirement year approaches.
In a typical setup, the fund manager shifts allocations from stock-heavy mixes to more conservative combinations of index funds over time. While Yahoo Finance notes advisers generally see benefits for younger savers, including diversification, automatic rebalancing, and reduced decision burden, near-retirees are flagged as a group with specific concerns.
The article cites a concern that the traditional glide path can become too conservative in the wrong way as retirement nears, potentially causing investors to miss equity gains when markets are strong. Jeff Judge of Chesapeake Financial Planners is quoted by Yahoo Finance saying that, for many savers who never rebalance, a well-run target-date fund can be better than an neglected account, but Rob De Lessio of Strategic Wealth Designers says his view becomes less enthusiastic as clients approach retirement.