Target-date funds are attempting to simplify your investments for retirement. According to the time horizon of the participant, investment in the account will move from more stock oriented investments when the person is younger to more conservative investments such as bonds when the investor is closer to retirement. Therefore, these funds provide a hassle free investment approach to many participants in retirement funds such as 401(k) and 457 plans.

Since the Pension Protection Act of 2006 endorsed the use of target-date funds as a reliable retirement vehicle, participation has swelled. The Investment Company Institute estimates that a whopping $343 billion is invested in these funds as of September 2011.

One disadvantage of this type of funds is that if an employee enrolls in a when he or she is closer to the retirement, depending on the market conditions they could lose some of their investments. As a result, some investment companies are diversifying investments into real estate investment trusts, Treasury Inflation-Protected Securities (TIPS), commodities and similar investment vehicles.

If you are participating in an employer provided 401(k) plan, consult your investment adviser to see whether investing in a target-date fund is suitable for you. It could give you a peace of mind in this otherwise very turbulent market.