Which fund automatically shifts toward safer investments as you near retirement?

• A. Bond
• B. Dividends
• C. Target Date Fund
• D. Stock

Answer: (C)

A Target Date Fund automatically adjusts its mix of investments as you get closer to retirement. It has a target retirement year and follows a glide path that gradually shifts from stock-heavy holdings to more bonds and other safer assets over time. This built‑in reallocation helps reduce risk and protect your savings as you near retirement, so you don’t have to manually rebalance to become more conservative.

Other options don’t fit this pattern. A bond fund focuses on bonds and doesn’t automatically become more conservative with a time-based plan. A stock fund stays equity-heavy and does not shift toward safer assets as retirement approaches. Dividends refer to income payments rather than a fund type that changes its risk profile over time.