Target Retirement Trusts
- Download Target Retirement Trusts overview [PDF 259K]
- What are target retirement trusts?
- How do target retirement trusts work?
- How do I choose a trust?
- How do I invest in these funds?
- More information
What Are Target Retirement Trusts?
Target Retirement Trusts are investment options offered through the State of Alaska Defined Contribution Retirement Plans. The trusts are designed to provide investors with a simple way to have exposure to a diversified portfolio. The Target Retirement Trusts are professionally managed by T. Rowe Price.
How Do Target Retirement Trusts Work?
The Alaska Target Retirement Trusts invest in four underlying common trust funds, each one emphasizing a different market sector: U.S. stocks, non-U.S. stocks, U.S. investment-grade bonds, and money market securities. The trusts with dates furthest in the future are the most aggressive with their investment allocations and invest primarily in equity securities. Over time, the allocations become more conservative, systematically decreasing exposure to stocks and increasing exposure to bonds and money market securities on a quarterly basis.
The trusts will gradually invest more conservatively in their target year and beyond. As illustrated below, the Target Retirement Trusts can still have a heavy stock weighting at the “Target Retirement Date.” With more of the investments in stocks, they can potentially still generate growth, which may help ensure that you don’t outlive your investments. But it also means more risk—potentially more than you are willing to tolerate at age 65. The trust will reach its final, most conservative allocation of approximately 20% stocks 30 years after reaching its target date.
How Do I Choose a Trust?
Simply select a trust with the year that most closely corresponds with your expected retirement date, or the trust that most closely suits your investment risk tolerance.
| Trust | U.S. Stocks | Non-U.S. Stocks | Bonds | Money Market/Cash |
|---|---|---|---|---|
| 2010 Trust | 46.0% | 11.5% | 34.5% | 8.0% |
| 2015 Trust | 50.0% | 7.6% | 31.1% | 11.3% |
| 2020 Trust | 59.7% | 13.0% | 23.6% | 3.7% |
| 2025 Trust | 66.7% | 14.6% | 18.0% | 0.7% |
| 2030 Trust | 68.5% | 17.0% | 14.5% | |
| 2035, 2040, 2045, 2050 & 2055 Trusts | 72.0% | 18.0% | 10.0% |
How Do I Invest in These Funds?
To learn more or to invest in a retirement date-based trust: