Dimensional Target Date Retirement Income Funds

Thoughtfully designed retirement solutions

Dimensional provides competitively priced, professionally managed retirement solutions for investors planning to retire in or around a particular year.
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A Suite of Options

Our suite of diversified target date retirement income funds allows investors to select the date closest to their planned retirement year in one low-cost, professionally managed strategy.


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Dimensional Target Date Retirement Income Funds

Dynamically Managed

Each fund provides a dynamic asset allocation glide path—seeking greater income growth in earlier years and greater income protection in later years—based on investors’ target retirement date.


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Researching Retirement: Myths and Realities About Asset Allocations

Thoughtfully Designed

Our funds are designed to manage risks linked to interest rates, inflation, and market volatility, each of which can increase future income uncertainty and negatively impact retirement income.


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Explore Our Target Date Funds
Dimensional Target Date Retirement Income Funds are available through financial professionals and select retirement plans. They are structured in five-year increments, allowing investors to select the fund closest to their anticipated retirement date.
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Changes in interest rates represent a key investment risk to retirement income.


For example, on savings of $300,000, earning 1.0% versus 3.5% in annual interest—or $3,000 versus $10,500—reduces annual income by 71%.


Well-designed retirement solutions should account for key investment risks, such as changes in interest rates, that may impact retirement income.

Impact of a changing interest rate

Graphic with circles, squares, and dotted lines showing the impact of changing interest rates. First circle shows savings of $300,000 with 3.5% interest rate in top box, leading to $10,500 in income per year, as shown in top circle; lower box shows 1.0% interest rate leading to $3,000 in income per year in lower circle, which is 71% less than top circle, as shown in smaller overlapping circle.

Hypothetical scenarios. For illustration purposes only. First-year income is calculated by applying the interest rate to the $300,000 account balance. Assumes no compounding fees, costs, or taxes.  

Over time, unexpected inflation can erode real wealth and spending power. Investors nearing or in retirement may be particularly sensitive to erosion in their purchasing power, which could mean getting by with less or a reduced standard of living.

Over 10 years, a 2% annual inflation rate results in an 18% reduction in real wealth. When the annual inflation rate is 2% higher, or twice as high, at 4%, real wealth is reduced by 32%.

Seemingly small changes in unexpected inflation may have a significant impact in reducing real wealth and income in retirement.

Unexpected inflation impact 

Graphic with circles, squares, and dotted lines showing the impact of unexpected inflation. First circle shows savings of $300,000 with 2.0% inflation over 10 years in top box, leading to $246,105 in real wealth, as shown in top circle, which is 18% less in real wealth, as shown in smaller overlapping circle; lower box shows 4.0% inflation over 10 years, leading to $202,669 in real wealth, as shown in lower circle, which is 32% less in real wealth, as shown in smaller overlapping circle.

Hypothetical scenarios. For illustration purposes only. The value of wealth after 10 years of inflation at the assumed 2% and 4% rates is calculated by dividing $300,000 by (1.02)10 and (1.04)10, respectively.

Changes in interest rates, equity markets, and unexpected inflation can create future income uncertainty and may negatively impact retirement income. As the investment time horizon shrinks, these risks are magnified for some investors.

Dimensional’s target date strategies seek to manage the risks to retirement income. Each fund dynamically rebalances its stock/bond mix to reflect its shrinking investment time horizon and increased risk from inflation and interest rate changes. Over time, our funds shift from having a focus on income growth to income risk management.

Graphic showing four pie charts of Dimensional’s target date funds shifting from having a focus on income growth to income risk management. First pie chart for Early Working Years is solid blue, with text below reading Contributions are invested primarily in income-growth assets (in blue), which are expected to increase in value over time. Second pie chart for Later Working years is more than half blue on left side with remaining part on right in yellow with text below reading Any increase in value of the income-growth assets can be invested toward more inflation-protected securities later in your career. Third pie chart for Approaching Retirement is more than half blue on right side with remaining part on left in yellow with text below reading The investment focus shifts from growing income to managing income risk, with more portfolio assets invested in inflation-protected securities to manage future retirement income risk. The fourth pie chart for In Retirement is mostly yellow with a small wedge of blue and text below reading The portfolio remains focused on income risk management assets (in yellow), in an effort to guard against risks like inflation or a market downturn.

Whether planning to retire earlier or work longer, investors can select a fund with a target date closest to their anticipated retirement date. For instance, an investor in 2020 who expects to work 30 more years may find the 2050 target date fund to be an appropriate selection.


The funds further out from their target date have more assets invested in stocks, while the funds closer to their target date have more assets in inflation-protected bonds.

Chart showing glide path of the Dimensional Target Date Retirement Income Fund’s asset allocation changes over time, with percentages on Y-axis (scale of 0% to 100%) and X-axis showing years to retirement (from 40 to 0), retirement date (0), and retirement years (0 to 15). Chart starts at 40 years to retirement with 95% in global equity and 5% global bonds until 25 years to retirement, when global equity begins to decrease and global bonds increase. At 20 years to retirement, income risk management (inflation-protected bonds) appears and begins increasing. Small pie chart above chart states that at 10 years until retirement, the portfolio holds a balanced mix of global equities, global bonds, and inflation-protected bonds. By the retirement date, global bonds disappear and global equity reaches 25% with inflation-protected bonds accounting for 75%. This allocation remains in place until 10 years into retirement, when global equity begins falling to 20% and inflation-protected bonds increases to 80% by 15 years into retirement.

Glide path based on expectation of the Dimensional Target Date Retirement Income Funds’ asset allocation changes over time. The actual asset allocations utilized by each fund may deviate from the allocations illustrated by this glide path.

Accessing Dimensional Target Date Retirement
Income Funds

Dimensional's Target Date Retirement Income Funds are available through financial advisors, a variety of brokerage platforms, and select retirement and savings plans.

How to Invest

Disclosures


Target Date Funds are designed to target a year in which an investor may withdraw funds for retirement or other purposes. Investments in target date funds are subject to the risks of their underlying funds, and asset allocations are subject to change over time in accordance with each fund’s prospectus. An investment in or retirement income from a target date portfolio is not guaranteed at any time, including on or after the target date. An investment in a target date portfolio does not eliminate the need for investors to decide—before investing and periodically thereafter—whether the portfolio fits their financial situation. For more information, please refer to the prospectus.


There is no guarantee this investment strategy will be successful, and it is possible to lose money with this investment. Investments in stocks and bonds are subject to risk of economic, political, and issuer-specific events that cause the value of these securities to fluctuate. Fixed income securities are subject to increased loss of principal during periods of rising interest rates and may be subject to various other risks, including changes in credit quality, liquidity, prepayments, and other factors. Inflation-protected securities may react differently from other debt securities to changes in interest rates.


Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) 306-7400 or at dimensional.com. Dimensional funds are distributed by DFA Securities LLC.


This information is not meant to constitute investment advice, a recommendation of any securities product or investment strategy (including account type), or an offer of any services or products for sale, nor is it intended to provide a sufficient basis on which to make an investment decision. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions.