Russell's Approach to Building a Simple and Powerful Solution to Retirement Saving January 2008 Grant Gardner, Ph.D. Director, Portfolio Strategies Yuan-An Fan, Ph.D. Senior Research Analyst Target date funds are designed to provide a simple investment solution for participants in defined contribution plans. In this paper, we outline the Russell methodology for designing these funds. This methodology has distinguishing features that work to improve the odds for successful retirement investing. Although there is no certainty this objective will be met, it should appeal to investors who would like to know their investment is explicitly designed to overcome the uncertainty found on the long path to financial independence in retirement. This commentary provides:   An overview of target date fund basics An explanation of the "human capital" model and how it relates to a target date fund glide path Recommendations on effectively measuring the performance of a glide path Request this Research A note about our research Our proprietary research is made available to our institutional clients, and many of these published papers are available to other institutional investors as well. If you are not a Russell client, but are an institutional investor, we welcome you to request this research piece. We only require your contact information on a short request form. To learn more about our services for DC plan sponsors, please contact Phil: Phil Enochs Director, Institutional Defined Contribution Services 866-203-2153 To learn more about our services for DB plan sponsors, please contact Rob or Gerry:   West Coast   East Coast Rob Ciro Director 866-926-5934 Gerry Lillis Director 866-459-4128 Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. USIRC4401			Related Information Request this Research Our Clients: Defined Contribution Plans Not All Target Date Funds Are Created Equal EBRI Survey Shows Many Americans Are Unprepared for Retirement   DC Plan Sponsors Contact Phil Defined Contribution Contact Phil Enochs Director 866-203-2153   DB Plan Sponsors Contact Rob or Gerry West Coast contact Rob Ciro Director 866-926-5934 East Coast contact Gerry Lillis Director 866-459-4128 Printer friendly version of this page