Why we automatically invest your money in a target date fund

For many people, the process of building their own investment portfolio is daunting. Our goal is to reduce the complexity and stress of evaluating, selecting, and mixing a portfolio on your own.

Auto investing, How it works. When you enroll in Icon, your money will be automatically placed into a target date fund that corresponds to your age. A target date fund is a mix of investments that automatically adjusts to help make sure your portfolio is allocated based on your age. By automatically placing your money in a target date fund, we remove the burden of building your own portfolio–it’s already done.

A common practice. The process of automatically placing accounts into a target date fund is common practice in 401(k)’s. This plan feature has proven to be very helpful for millions of people who don’t have the time, expertise, or interest in building and maintaining a diversified portfolio.

How target date funds work. The great thing about a target date fund is that it adapts over time. It’s built to be a mix of investments appropriate to your age. As you get older, it automatically adjusts to help make sure your mix of investments is on target for when you reach retirement. You need to be in only one target date fund to have a diversified portfolio.

Icon’s target date funds. The target date funds in Icon were selected by Icon’s independent advisory board, which consists of members who are all experts in investing and portfolio management. The target date funds in our plan is managed by State Street Global Advisors (SSGA). SSGA is one of the world’s largest, oldest, and most respected asset managers.

Of course, you can always opt out of the target date fund and mix your own portfolio by selecting investments from a menu of funds available through Icon.

As a point of comparison, the average fees on a target date fund are 0.55%.

Icon’s target date fund has a low flat fee of just 0.09%.  In addition, because a target date fund is a mix of funds that is professionally managed, you don’t need the added cost of an investment advisor.

 

NEXT UP Icon’s Fees: Everything you need to know What investments are available through Icon? Why we automatically invest your money in a target date fund What if I want to take money out before I retire? My employer is offering Icon. How does it work? The Savers Tax Credit–you might be eligible Emergency savings–you really need them Paying taxes as an independent contractor The Savers Tax Credit–you might be eligible Health Savings Accounts–An overview Using your home equity–Things to consider A close look at Social Security Student loans feel like a weight? Emergency savings–you really need them Do you receive a Form 1099? What you need to know Asset allocation—Why it matters The basics of stocks and bonds Annuities–What you need to know High fees can erode your savings Thinking of consolidating old 401(k) plans? What’s a target date fund? Save early and often What do I do with my 401(k) when I change jobs? Find out why it’s important to review your statement How much can I contribute to my plan? Naming a beneficiary The impact of high fees on savings Auto-escalation–A great idea What happens if I get fired or laid off? Employer matching contributions–Don’t leave anything behind! Coming Soon! What if I want to take money out before I retire? Save early and often What do I do with my 401(k) when I change jobs? What if I want to take money out before I retire? What do I do with my 401(k) when I change jobs? What if I want to take money out before I retire?