Life is just too hectic and complicated, isn't it? You probably have enough to do, what with your demanding job, your busy family, and your personal interests, like having fun. With all that going on, who really wants to spend time studying investments and moving money from here to there and from there to here? And even if you had some time, do you really have the interest and the expertise? For many of us, the answers are no, no, and no.

Fortunately, there's a relatively new development in the financial world that can make your retirement savings a lot simpler: Meet your new friend, the target-date mutual fund.

What it is
A target-date mutual fund is designed around a particular year. Think about when you want to retire. If you're 45 years old now, perhaps you're planning to retire at age 60 or 65. That would be in 2022 or 2027.

You probably know that while most of us should have most of our money in the stock market, as we approach and enter retirement, we should consider shifting some of that moola into bonds and other less-volatile asset classes. But that can be a headache, and something we neglect or put off (partly because we're not so confident about our skills at it) doing so.

What you can now do, though, is invest a good chunk of your money into a target-date fund that matches your needs -- perhaps, in this case, in a "2025" fund. Those funds are designed for folks planning to retire in 2025, which would be when you're 63.

How it works
These funds are typically offered by big fund families, and each one is invested in a handful of other funds from the same fund family. Three well-respected companies with such offerings are Fidelity, T. Rowe Price, and Vanguard.

Let's look at the Vanguard target-date funds. Most of them are invested in a mix of the same handful of Vanguard funds, just in different proportions. Below you can see some the percentages invested in six Vanguard funds by its target funds dated 2010, 2015, 2025, 2035, and 2045:






Vanguard Total Stock Market (VTSMX)






Vanguard Total Bond Market (VBMFX)






Vanguard European Stock Index (VEURX)






Vanguard Pacific Stock Index (VPACX)






Vanguard Emerging Markets
Stock Index






Numbers may not add up to 100% because of rounding or additional holdings.

If you look at the table, you can see how the funds are adjusted to hold different proportions of stocks and bonds according to how close investors are to retirement.

To give you an idea of what these various funds invest in, know that the Vanguard Total Stock Market fund holds almost every U.S.-traded stock, from Citigroup (NYSE:C) and McDonald's (NYSE:MCD) to LifeCell and Peet'sCoffee & Tea. The European index includes companies such as HSBC Holdings (NYSE:HBC) and GlaxoSmithKline (NYSE:GSK). The Pacific fund contains the likes of Toyota (NYSE:TM) and Canon (NYSE:CAJ). And the emerging markets fund holds companies such as Samsung Electronics, Lukoil, and Posco (NYSE:PKX).

Learn much more about target-date funds in Zoe Van Schyndel's "Retirement Planning the Easy Way?"

What to do
So, should you run and snap up shares of funds like these? Not necessarily. Remember that we're all different -- even those of us who might be hoping to retire in 2025. For some of us, it might make sense to have 90% or more of our assets in stocks, instead of the 80% favored by the Vanguard 2025 fund. Others might want to have 10% of assets in emerging markets, not 3%.

Your best bet is to read up on how to best prepare for your retirement and consider a wider range of mutual funds and stocks. I've found a host of very exciting mutual funds among Shannon Zimmerman's recommendations in our Motley Fool Champion Funds newsletter, and I've invested in several of them. His picks are beating their benchmarks by an impressive 12 percentage points on average. So whether you're looking for top-notch small-cap funds, large-cap funds, value funds, growth funds, bond funds, international funds, or something else, he's got some great suggestions for you.

You can try the service free for a month with no obligation to subscribe, or you may want to learn more about mutual funds in these articles:

Longtime contributor Selena Maranjian owns shares of McDonald's. GlaxoSmithKline and Posco are Income Investor recommendations. The Motley Fool is Fools writing for Fools.