Today, let’s learn about retirement target funds.
Listening to the name, we should be able to guess that this fund is to help people retire.
You may be thinking, why should I invest in a pension target fund? Don’t I already have social security? It should be noted that pension is not just a matter of the state.
According to the idea of ??elderly care in mature countries, there are three pillars of elderly care.
The first pillar is the national pension security.
The second pillar is corporate annuity.
The third part is commercial pension.
In layman's terms, the state bears part of the burden, the enterprise bears part of it, and the individual bears part of it.
In our country, most people's pensions actually come from the first pillar, which is the national pension security. The second and third pillars are missing.
However, everyone also knows that there is great pressure in society now. Young people are getting married later and later, and their willingness to have children is getting lower and lower. Our country’s fertility rate continues to decline, the rate of aging is accelerating, and the country is under great pressure.
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With the serious aging of the population, it is still unknown how much pension we will receive when we retire in the future. Therefore, it is necessary for us to take precautions when we are young and take the initiative to strengthen the security of old-age care.
You may be thinking, if I invest in stocks or other funds, which is considered financial management, do I still need to buy a pension target fund? My suggestion is that if you are under 30 years old, don’t think about it yet.
If you are a seasoned investor, there is no need to think about it.
If you are over 30 years old and have less investment experience, you can allocate a small portion of your funds to a pension target fund.
Okay, let’s officially start to explain the pension target fund. Part 1. Introduction to the pension target fund. The pension target fund in our country was actually launched in a very short time. It only officially appeared on the stage in 2018.
Pension target funds, as the name suggests, refer to funds whose purpose is to pursue the long-term stable appreciation of pension assets.
Pension target funds are essentially funds of funds.
What does this mean? Unlike ordinary funds that invest directly in stocks and bonds, this fund specifically invests in a "basket" of funds.
The purpose of this is to optimize asset allocation and reduce investment risks.
Although it is not directly used to invest in A-shares, pension target funds can invest up to 80% of equity funds such as stock funds and hybrid funds. In the long run, they have the opportunity to better outperform inflation and achieve stable value-added pensions.
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The establishment of pension target funds is actively promoted by the state.
Why? As we just mentioned, the country is aging seriously, and social pension will become a big problem.
The introduction of pension target funds can guide people to finance their retirement, rather than relying solely on government social security.
So since the newly launched pension target fund is supported by the state, has the state provided any tangible benefits? The answer is yes.
Invest in a pension target fund, which can enjoy certain tax deferral policies on a trial basis.
In other words, the money spent to buy a pension target fund can be deducted from pre-tax income. After retirement, when we receive funds from the pension target fund, the tax will be deducted.
This is a good policy.
According to different investment strategies, current pension target funds can be divided into two categories, namely target date funds and target risk funds. The first type is target date funds.
Its main features are: First, it is divided according to the retirement age of investors, and the year in the fund name is the corresponding retirement year.
For example, the "China*2040 Fund" is suitable for people who retire from 2038 to 2042.
The product dates currently on the market cover the years 2030 to 2050.
Second, as age changes, this kind of fund automatically adjusts its asset allocation ratio.
Young people have a high proportion of stocks, and older people have a lower proportion of stocks.
Third, products are generally released at five-year intervals.
For example, 2030, 2035, 2040, etc.
The second type of pension target fund is a target risk fund. This type of fund assumes that investors have a clear understanding of their own risk tolerance. The risk level is generally set to "low" or "medium".
Such as TEDA* Balanced Pension (FOF), Bank of China* Pension (FOF), etc.
Target date funds and target risk funds, I suggest that if you want to consider it, just choose target date funds. This is the most commonly used and mainstream type of pension target fund at home and abroad.
Next, let’s talk about the income of pension target funds, which is also the issue that everyone is most concerned about.
To predict the income of pension target funds, there are two sets of data for reference.
In 2017, the social security fund’s investment income was 184.614 billion yuan, with an investment rate of return of 9.68%. In addition, the social security fund’s average annual investment rate of return since its establishment was 8.44%.
Pension target funds and social security funds are both pillar products in the country's pension sector. They belong to the same line and have strong backing from the government. The nature of their investment targets is also basically the same.
Judging from the data of social security funds, there is a high probability that pension target funds can achieve an average annual rate of return of about 8%.