Empower Target Date Funds with Proven Performance

Empower Retirement's Target Date Funds have consistently delivered strong performance, with the Empower Retirement Target Date Funds series ranking among the top quartile in the Morningstar Target Date Fund category for the 1-year, 3-year, and 5-year periods ending March 2022.

Investors can trust these funds to provide a solid foundation for their retirement savings, with a proven track record of outperforming their peers.

Empower Retirement's Target Date Funds have also been recognized for their low fees, with the funds' expense ratios consistently below the median for their respective categories.

This commitment to performance and cost savings has earned Empower Retirement's Target Date Funds a reputation as a reliable choice for investors seeking a straightforward and effective retirement savings solution.

Target Date Funds are a type of investment that automatically adjusts its asset allocation based on a specific retirement date or target date.

They offer a hands-off approach to investing, making it easy for people to save for retirement without needing to constantly monitor and adjust their investments.

By automatically shifting from more aggressive investments to more conservative ones as the target date approaches, Target Date Funds aim to provide a steady stream of income in retirement.

This feature is especially helpful for those who are not comfortable making investment decisions or don't have the time to do so.

Target Date Funds typically offer a range of investment options, including stocks, bonds, and other assets, to create a diversified portfolio.

The fees associated with Target Date Funds can vary significantly depending on the provider, ranging from 0.03% to 2.0% or more per year.

This means that investors should carefully review the fees associated with their Target Date Fund before investing.

The fees are often higher for Target Date Funds than for other types of investments, which can eat into returns over time.

However, some Target Date Funds have lower fees than others, making them a more attractive option for investors.

Adapting QDIA for Modern Plan Design is crucial to ensure the plan remains effective and beneficial for participants. Diversification is key, but it doesn't ensure a profit and doesn't protect against loss in declining markets.

Asset allocation and balanced investment options and models are subject to the risks of the underlying funds, which can be a mix of stocks/stock funds and bonds/bond funds. This is why it's essential to carefully review the prospectus and/or disclosure documents.

A dynamic QDIA can be a more modern plan design, but it's not without its risks. The guaranteed income benefit does not guarantee the investment performance of the applicable covered fund.

Fiduciary considerations are crucial when implementing a dynamic QDIA, and Groom Law Group's Q&A is a valuable resource for understanding these considerations.

Empower target date funds are a popular choice for investors looking to simplify their portfolio management. The expense ratio is a crucial factor to consider when evaluating these funds.

The Empower Lifetime 2045 Svc fund has a high expense ratio of 1.01%, which is 48% higher than its category average. This means that a significant portion of the fund's assets are being used for administrative expenses and operating costs.

High portfolio turnover can also lead to higher expenses and lower after-tax returns. The Empower Lifetime 2045 Svc fund has a relatively low portfolio turnover rate of 19%, which is lower than the average portfolio turnover rate of 24% for the Target-Date 2045 category.

The fund's performance is also worth noting. In January 2025, the Empower Lifetime 2045 Svc fund returned 3.1%, which earned it a grade of C, as the Target-Date 2045 category had an average return of 3.1%.

Here's a breakdown of the fund's fees:

Note that the expense ratio is 0.93%, which is lower than the Empower Lifetime 2045 Svc fund's expense ratio of 1.01%. The management fee is also relatively low at 0.12%.

Total Return Ranking - Trailing is a key metric to consider when evaluating the performance of target date funds. It measures the fund's return over a specific period, relative to its peers in the same category.

The table below shows the Total Return Ranking - Trailing for MXZHX, a target date fund, over various periods.

It's clear that MXZHX has consistently ranked high in its category over the past few years, with a 100% rank in the 5-year period. This suggests that the fund has been performing well relative to its peers.

Empower target date funds have a significant impact on your investment portfolio. The Empower Lifetime 2045 Svc fund has $375 million in total assets, which is below the $1 billion average for the Target-Date 2045 category.

This lower asset amount can sometimes lead to higher average expense ratios. However, for certain investment categories, like small-cap investing, having too many assets can make it difficult to implement the desired active strategy.

The fund's dividend yield is another important consideration. With a trailing dividend yield of 1.75%, it's below the 1.93% category average. This means you can expect less dividend income from this fund compared to its peers.

Here's a quick comparison of the Empower Lifetime 2045 Svc fund's assets and dividend yield:

The Empower Lifetime 2045 Svc fund has $375 million in total assets, which is below the $1 billion average for the Target-Date 2045 category.

Lower assets under management can translate to higher average expense ratios, but it's also possible for managers to struggle with implementing their active strategy if assets grow too large or too quickly.

A lower asset base can be beneficial for smaller investment categories, such as small-cap investing.

The fund's trailing dividend yield is 1.75%, which is below the 1.93% category average.

It's essential to consider the relationship between risk and return, and the impact of costs and taxes on your realized returns.

The Empower Lifetime 2060 Fund is a part of the Great-West Funds family, which has a long history of providing investment solutions to its clients.

The fund was launched on May 1, 2019, and has been managed by Andrew Corwin since its inception.

Here are some key details about the fund: