If you’re like most people, the thought of having to actively manage your retirement savings plan can be overwhelming. After all, few people have the time, expertise or desire to regularly focus on their portfolio, let alone to make investment decisions that best suit their long-term financial needs for retirement.
Target-Date Retirement Funds can help simplify the investment decision-making process because the asset allocation of the Retirement Funds (the mix of stock, bond and money market funds) is more aggressive for individuals with a longer time horizon to retirement and becomes more conservative as you near and begin retirement – in other words, as you approach the target date. The fund will continue to adjust its asset allocation after the retirement date passes.
According to Joe Gaffoglio, Executive Vice President and COO of Mutual of America Capital Management LLC,1 "Mutual of America's Target-Date Retirement Funds are a convenient and cost-effective way for individuals of all ages to save for their retirement."
A Diversified and Convenient Way to Invest
Mutual of America Investment Corporation's Target-Date Retirement Funds offer you the benefit of having investment professionals select a mix of investment funds and the convenience of having them adjust that mix for you over time.
The target date in each Retirement Fund's name is the approximate date that the fund expects investors to retire and begin withdrawing their account balance. You can choose the Retirement Fund that most closely matches your intended retirement date. That fund will have a mix of investments appropriate for its time horizon, and the mix of investments will change over time as the time horizon changes.
Retirement Funds 101
Mutual of America Investment Corporation Retirement Funds provide a simplified retirement strategy. Each fund may invest in a selection of stock, bond and money market funds, which are managed by the investment professionals at Mutual of America Capital Management LLC.
The longer the time horizon until a Retirement Fund reaches its target retirement date, the greater the emphasis the fund will place on achieving capital appreciation by investing more heavily in equity funds.
As the Retirement Fund approaches and passes its target date, its investment mix becomes more conservative by investing less in equity funds and more in fixed income funds.2 Such a maturing Retirement Fund will move toward the allocation mix of the Mutual of America Retirement Income Fund over the 10-year period after the target year has been attained.
Before you invest, you should always consider your risk tolerance, time horizon, personal circumstances and complete financial situation, in addition to an approximate retirement date. Keep in mind that there is no guarantee that a Retirement Fund will correctly predict market or economic conditions and, as with other mutual fund investments, you could lose money. The value of a Retirement Fund is not guaranteed at any time, including at or after the target date. Your circumstances and objectives could change along the way, so you should monitor your investment fund choices periodically to ensure they meet your investment goals.
Index Investing Keeps Fees Low
Each Retirement Fund invests in a variety of other investment funds offered by Mutual of America Investment Corporation, and each of those underlying funds charges fees. These fees affect your returns. A substantial portion of each Retirement Fund is invested in index funds offered by Mutual of America, which tend to have lower fees.
Questions About Our Retirement Funds?
1 Mutual of America Capital Management LLC is a registered investment adviser and an indirect, wholly owned subsidiary of Mutual of America Life Insurance Company.
2 At any time within 10 years after a Retirement Fund has reached its target retirement year, the assets may be transferred into the Mutual of America Retirement Income Fund if approved by the Board of Directors of Mutual of America Investment Corporation. The maturing Retirement Fund will then cease to exist, and its participants will automatically become participants in the Retirement Income Fund. The Retirement Income Fund is intended for investors who have reached retirement or have passed their anticipated retirement year, and seeks current income consistent with preservation of income and, to a lesser extent, capital appreciation.
Before investing, you should carefully consider the investment objectives, risks, charges and expenses of the variable annuity contract and the underlying investment funds. This and other information is contained in the contract prospectus or brochure and underlying funds prospectuses and summary prospectuses. Please read the contract prospectus or brochure and underlying fund prospectuses and summary prospectuses carefully before investing. The contract prospectus or brochure and underlying fund prospectuses and summary prospectuses can be obtained by mail or by calling .
Mutual of America's group and individual retirement products are variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment funds you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should carefully consider a variable annuity contract's other features before making a decision.