Page 14 - Latham & Watkins 401(k) Savings and Profit Sharing Plan

Investing Strategies:
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Target Retirement Trusts
If you lack the time, comfort, or desire to manage and monitor your 401(k) Plan savings options on your own, Target Retirement Trusts may be suited for you. These funds automatically adjust over time to help meet changing risk and return objectives. By choosing the fund that closely matches the year you plan to retire and your other financial goals, you set your retirement plan in motion, leaving the daily details to professional investment managers.
What Are Target Retirement Trusts?
Target Retirement Trusts were developed
for participants who want to contribute and save for retirement, but desire a professional to manage the day-to-day investment and asset allocation decisions.
Each Target Retirement Trust is invested across multiple asset classes, such as stocks, bonds, and money market instruments. These trusts are set up so that you can direct your investments into one trust, from the time you begin to save until you retire.
How Target Retirement Trusts Work
• Choose the fund that closely matches the year you plan to begin withdrawals and your other financial goals.
• Investment professionals will make the decisions about investments and asset allocation for the underlying fund.
• Over time, the asset allocation becomes more conservative.
• There is also an income fund designed to meet your needs in retirement.
• Eventually, the fund merges with an income fund, containing a mixture of cash, bonds, and stocks designed for those currently in retirement.
• Keep in mind that, as with all investments, there’s no guarantee that target date portfolios will achieve the returns or provide the income necessary to last through retirement.
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