what is a life cycle fund 
life cycle funds are asset allocation funds in which the share of each asset class is automatically adjusted to lower risk as the desired retirement date approaches as a practical matter this usually means that the percentage of bonds and other fixed income investments increases life cycle funds are also known as age based funds or target date retirement funds a young investor saving for retirement would typically choose a life cycle fund with a target date that is 30 to 40 years away however an investor nearing retirement age might be planning a working retirement with some income from a small business such an investor could select a life cycle fund with a target date that is 15 years in the future accepting higher volatility can help to stretch retirement funds over the 20 or more years of old age most individuals can expect life cycle funds are based on the idea that young investors can handle more risk but this is not always true 