Target date funds can be a great instrument for financial savings for retirement. It’s pretty simple: you pick a fund, start pouring your savings into that fund, and forget about until you retire.

Target date funds have a specific date. For instance, you may plan to retire in 2050. Then, the funds keep piling up to a certain designated amount you need for your retirement. You get to maintain your current lifestyle, minus the work, after your retirement.

So, who actually benefits from these? Specifically, how exactly do you know whether this will work for you since there are tons of other retirement plans besides target date funds?

You Let A Professional Handle Matters For You
Let’s say you’re the type of person who wants to leave asset allocation to a professional fund manager in order to get peace of mind. If you are, a target date fund is just what you need. Here, you don’t have to worry about conducting research, choosing your stocks and bonds, setting up the asset allocation based on their performance, and so on. All of that is left in the capable hands of a finance professional.

You Stick To Long-Term Goals
If you’re a good goal setter—and are good at following through and completing long-term financial goals, such as setting funds aside till retirement—then target date funds suit you.

You Don’t Want To Pay Multiple Management Expense Ratios
Target date funds usually hold stocks, bonds, ETFs and equities. You’ll need to research, monitor and balance your investments in a way that one of them doesn’t make you portfolio overweight in that sector of the industry. Only if you can do this are target date funds a good fit. The best part, you avoid paying broker fees, online trading fees and any forms of multiple management expenses. Your assets get allocated accordingly, and your investment portfolio gets balanced by a professional till your retirement date.

If you are someone who can meet certain required criteria, don’t mind volatility in the stock market, and don’t want to actively manage your retirement savings accounts, target date funds may be what you need.