Whether retirement is just around the corner or still down the road, we can help you achieve a successful retirement outcome.
Learn more about how a target date strategy works.
The portfolio allocations in the video are for illustrations only and do not reflect the allocations for the entire ClearPath suite.
Thinking about retirement isn’t just smart, it’s essential if you want to maintain your current standard of living and enjoy your later years without the burden of financial stress.
Whether you're just starting out or nearing the end of your working years, these videos can help you invest with confidence and help put you on the path to achieving your retirement dreams.
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Hey, everyone. My name is Jon Knowles.
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And I'm Stephanie Mariamo.
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We work at Fidelity, one of the largest investment management companies in the world. We're based here in Canada and so much of what we do and talk about every day has to do with retirement and the investment options that can help support investors like you save for your financial future.
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If you have access to this video series it means that your company offers a wonderful benefit to you and that benefit is long-term saving.
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Whether you're just starting your career or you've been working for a few decades already retirement affects everyone.
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But surprisingly, it's not talked about it.
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While many of us enjoy working and find fulfilment in our jobs most people also dream of retiring one day.
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Your dream retirement may be to travel the world, to own a cottage, pick up tennis, or just spend more time with loved ones.
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Dreams like these take careful financial planning throughout your lifetime because life often doesn't always work out the way we planned.
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Regardless of your current age, occupation or financial status planning for your future is something that should be on your mind for three key reasons, lifestyle, longevity and adapting to changing circumstances.
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First up, lifestyle.
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When we talk about achieving positive retirement outcomes we're describing being able to maintain your current lifestyle while into retirement and getting to enjoy your retirement years without the burden of financial stress. This may even allow you to pursue passions and hobbies you may not have had time for in your working years.
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After spending decades of your life dedicated to earning money and enjoying the life you've built the transition into retirement may feel daunting if your financial picture isn't conducive to the lifestyle you envisioned.
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Next, longevity.
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On average our population is living longer.
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That is great news but it also means retirement can last for many years, and in many instances longer than what you originally planned for.
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This increase in life expectancy requires careful planning to ensure that your savings last throughout your retirement.
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Finally, adapting to changing circumstances.
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While we can spend time setting goals and planning for the future life is not linear. Your journey evolves over time due to life events, economic conditions, lifestyle changes, personal goals, or health diagnoses.
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Similar to the way that your life evolves your long-term plan is not static and it should evolve with you.
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The process of thinking and planning for retirement is ongoing and can occur throughout your working years, not just as you approach retirement.
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The earlier you start this process the better but it's never too late or too soon to start.
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Exactly, Steph. To illustrate this point I want to introduce you to our two friends, Rick and Sophie, who have the same amount of time but two different savings paths. Starting with Rick, Rick is 35 years old and is a tradesperson. Up until this point he hadn't thought much about retirement.
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Rick starts saving today and makes one contribution of $5,000 each year for the next 10 years.
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He also manages to get a pretty good long term return of 8% each year. After 10 years Rick pauses his contributions and holds onto his investments for another 10 years earning the same 8% annual return. The value of his savings at 55, 20 years later, would be $168,887.
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Now let's talk about Sophie.
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Sophie decided to wait 10 more years until she is 45 years old to start contributing. To make up for the lost time she makes 10 annual contributions of $10,000 earning the same 8% return as Rick.
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By the time Sophie is 55 the value of her investment would only be $156,455.
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For Rick starting early even with smaller contributions result in a higher ending balance despite contributing half as much as Sophie.
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This illustration is meant to be simple and outline the power that compounding can have on your long term success and long term wealth.
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It is important to highlight that any matching programs offered by your employer help to amplify the savings that you're setting aside.
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Matching programs are designed to offer an improvement in your savings journey.
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It is worth ensuring that you have all the information available to you.
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You can connect with your group retirement plan administrator for more information about your plan specifically.
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As we mentioned earlier Jon and I work closely together, spending time sharing insight into the investment opportunities designed for future focus savers.
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These are called target date funds and at Fidelity they're called ClearPath target date funds.
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What's to come is a deeper dive into what target date funds are, the advantage that they may provide to long term and retirement savers, how they take complexity out of finding the right investment mix, and some added insights on selecting the target date fund that's right for you.
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While you can't plan for everything that life might throw your way you can try to prepare for the unexpected.
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Whether retirement is just around the corner or still down the road Fidelity is here to help you achieve the future of your dreams.
Jon and Stephanie from Fidelity break down the importance of starting early, the magic of compounding, and how to adapt to life's twists and turns. It's never too early (or too late) to start planning for your dream future!
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Hi everyone, I'm Stephanie.
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And I'm Jon.
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Today's focus, understanding target date funds.
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First, though, let's set the stage.
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In the retirement account offered through your company you typically have two approaches to investing. Let's call these Do-It-Myself and Do-It-For-Me.
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Do-It-Myself is when the saver also becomes the investor.
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You are required to make all the investment decisions like choosing how many stocks to own and which parts of the globe to invest in.
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Beyond this you will have to monitor and adjust this mix over time as markets change and strategize how to diversify your investments.
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Do-It-For-Me, as the name suggests, is when you outsource the investment decisions to an investment manager like Fidelity.
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Today, target date funds are the most common investment option in this Do-It-For-Me category. That is what we'll spend our time discussing.
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What actually is a target date fund?
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Well, a target date fund is an all-in-one investment solution designed to help simplify saving for retirement or other goals.
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As a long term investment they can aim to help you build wealth as you save through your career but also help you make the transition into retirement.
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It's professionally managed incorporating a mix of different investments like stocks, bonds and other sophisticated investments from Canada and across the world, all within a single fund.
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Holding a variety of different investments is called diversification and it's an important tool to help manage the level of risk in a given portfolio and in your retirement account as a whole.
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Now, the real magic behind target date funds is that over time the mix of investments automatically adjust based on a selected timeframe, or target date following you through your life as you get closer to retirement and then eventually transition into it.
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That's why they're called target date funds.
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Each fund has a year in its name, which is the target date, the date that most closely reflects your approximate retirement.
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For example, someone expecting to retire in the year 2044 would invest in the fund that has 2045 in the name.
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Why does the mix of investment change over time?
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Well, when investors are younger retirement is likely decades in their future.
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Because of this their horizon is very long so they have more time to allow the market to fluctuate and to allow their investments to grow.
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As a result target date funds for younger Canadians invest more heavily in stocks which typically have higher growth opportunities in the long run.
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As investors near retirement when they'll need to begin to use their savings for income they may want to protect more of the money from decreasing in value. To meet this objective target date funds gradually adjust to become more conservative, decreasing their investments in stocks and increasing their investments in bonds and inflation-protected investments.
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How do we make these adjustments?
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They're made gradually by professional investment managers like Fidelity using what we call the glide path.
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We make strategic choices based off of extensive research and work to manage the risk of the portfolio over time by selecting various underlying investments.
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Exactly, Jon. Now, think of your investments as a garden and Fidelity's investment management professionals as gardeners.
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As plants grow you need to care for them in different ways using new tools, and sometimes even trimming them back.
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This allows them to flourish in the long run.
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Similarly, in a target date portfolio as you near retirement we trim riskier investments and add more conservative ones to the portfolio.
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It is important to remember that target date funds are designed as a lifetime investment strategy. Because they automatically adjust to your stage of life you can stay invested in the same fund through your entire career and into retirement.
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It removes much of the guesswork from long term investing.
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In conclusion, target date funds are often seen as a low cost investment option for retirement savers.
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They provide ongoing professional investment management that includes research and asset allocation, regular rebalancing and robust risk management.
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Over time target date funds can help your savings grow producing a source of income for you come retirement.
Dive into the world of target date funds with Jon and Stephanie as they break down how these all-in-one investment solutions can simplify your retirement and future investment planning.
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Hey there, I'm Jon.
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And I'm Stephanie. Fidelity is one of the world's largest and most experienced investment companies and it's the second biggest target date manager in North America. Pensions, institutional investors, companies and individuals like yourselves have entrusted us with managing roughly $900 billion on their behalf.
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Here in Canada we call our target date franchise ClearPath.
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We're very proud that we get to help hundreds of thousands of Canadians save towards their long term objectives.
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Our goal for ClearPath is to help you maintain your standard of living once you reach retirement by keeping your investment mix aligned with your long term financial goals whether your retirement is just around the corner or still far off.
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Our ClearPath portfolios are managed by three portfolio co-managers, Bruno Croco, Andrew Dierdorf and Brett Sumsion.
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Together they have decades of experience at Fidelity and in the investment industry. The team's knowledge, experience and skills come to life through an investment process that has been tested for decades.
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The investment process is designed to ensure that all investment decisions are aligned with the retirement savings objectives of Canadians today and in the future.
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But it's not just up to these three individuals.
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They're also supported by almost 1,000 investment professionals and researchers at Fidelity who are spread across the globe.
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Why does this matter? The investment process is developed by using cutting edge research. Having such a vast global footprint provides direct access to things like local market dynamics, regulatory differences, consumer behaviour, and local specific investment trends.
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This localized knowledge allows us to ask more detailed questions, uncover new investment opportunities and develop unique and differentiated insights. We believe this is a key to delivering better retirement outcomes for Canadians.
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Unlike other investment strategies ClearPath goes beyond traditional financial market research. We spend a great deal of time researching you.
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Well, maybe not you specifically but Canadians in general.
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ClearPath is meant to be a comprehensive retirement solution and that means we need to understand who invests with us and how their needs change through time.
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What does this research look like in practice?
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We call it Canadian Investor Characteristics Research.
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Our investment professionals look to find answers to questions like how are Canadians saving, what are the risks facing Canadians as they age, how does your employer improve your odds of retirement success through various retirement benefits, what government income programs will be available to you when you retire, what does the retirement outcome look like, how many years of retirement income might Canadians need?
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By asking these questions, our investment team can better understand your needs and tolerance for risk by creating a more holistic profile of Canadian investors and retirement savers and using this multi-faceted research to make informed decisions.
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As Canadians once we reach retirement we're also entitled to some first-class government support programs like Old Age Security or CPP and QPP, Canada and Quebec Pension Plan.
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ClearPath is designed to help you accumulate wealth as you save, and when you make the transition into retirement it can provide income that complements these government social security programs.
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As we mentioned previously the backbone of our target date portfolios is our glide path. The glide path is the way the investment mix changes over time.
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At Fidelity we emphasize age-appropriate asset allocation ensuring we are balancing risk and reward appropriately throughout your lifetime.
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Think of our ClearPath target date portfolios as living beings, meaning that they will change over time, adapting to the evolution we see in Canadian investors as well as the financial markets.
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As our research highlights new challenges and opportunities facing Canadians our portfolios will adjust to accommodate these new realities and our age-appropriate investment mix can continue to support your long term financial goals.
Discover how Fidelity’s investment management team and cutting-edge global research help Canadians like you achieve their long-term financial goals.
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Now that we've covered what target date funds are and how they work let's now touch on why it's important to select the right one.
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Selecting the right target date fund for you is an important step to ensure that these funds work as they are intended.
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As a brief recap, when we construct our ClearPath target date funds we aim to understand your unique needs and sensitivities at each phase of your savings journey. This understanding informs our decision-making process such as determining suitable risk exposure and selecting investments at each stage in your life.
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Selecting the version of ClearPath to invest in can be a little bit overwhelming. Usually we have about 12 different funds that in name all seem pretty similar but each target date fund will have a different date in the fund name.
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Take ClearPath 2055 as an example.
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This portfolio has been carefully constructed for individuals who anticipate to retire around the year 2055.
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It is important as an investor to select the target date fund that's right for you. To do so first determine the year in which you expect to retire.
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Many Canadians expect to retire at about 65 years old.
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You might notice that there isn't a portfolio for the specific year you're hoping to retire in. That's okay, you can round up or down to the closest date. For example, if I were planning to retire in the year 2047 I could select the 2045 portfolio.
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If you accidentally select a target date fund that is not aligned with your retirement date the result might be that your investments could take on too much risk or too little.
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Either way this could lead to a different outcome than you were dreaming of.
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If you find yourself in that situation don't fret.
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We encourage you to contact your program retirement administrator for additional information and support to making the necessary adjustments.
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We often get the question, do I need more than one target date fund?
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The simple answer is no.
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Target date funds like ClearPath are designed to be a one-stop shop.
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You should only need one portfolio to help you accomplish your retirement objectives because each portfolio on its own offers a great mix of underlying investments from across the globe thoughtfully curated based on each target retirement date.
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Selecting the correct version of ClearPath is a great starting point but that doesn't mean your work is done.
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Achieving positive retirement outcomes requires consistent contributions and savings over the long term.
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It's not about being ready to retire overnight but more about making progress towards your goals over the duration of your career.
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Now let's walk through an example of this, bringing to life how target date funds work in the real world.
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Here we have Alex. Alex just turned 25 and she's saving in her group retirement program. She selects the ClearPath 2065 target date fund because she thinks that's when she'll be ready to retire.
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Today, because she's far from that retirement date, her portfolio is primarily invested in equity investments like stocks from around the world.
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This is because funds with a target date further out in the horizon are focused on growth and they invest in higher amounts of equity investments because of the potential for higher investment returns.
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Alex's portfolio also has additional investments that offer some balance.
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As time passes, 20 years go by and Alex has continued to save and make regular contributions but life around her looks very different.
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She's progressed in her career and now has a wonderful daughter.
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Alex still invests in that same ClearPath 2065 target date fund but now the portfolio has changed.
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Alex's team at Fidelity made gradual adjustments to both the type of investments and the amount allocated to each of those investments.
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While Alex is still a way away from retirement her portfolio has begun the de-risking journey, meaning it is gradually getting more conservative with the passage of time. This also means that more of her savings will gradually be invested in fixed income and bonds.
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As Alex approaches her retirement date her portfolio becomes even more conservative with a balanced mix of equities and bonds to minimize risks. This reflects the recognition that a large fluctuation in Alex's savings would be undesirable but also that she may need to use her savings for another 30 years to fund her retirement.
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The journey doesn't stop there. Even into retirement Alex's ClearPath 2065 portfolio keeps working for her and continues to adjust, selling equities to buy more bonds, aiming to help her savings last through her retirement years.
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That's why it's important to select the target date fund that is right for you.
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It's obvious to say that as you age your life will change, it's less obvious to expect that your portfolio will automatically adjust for you.
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By using target date funds to help grow and protect her retirement savings Alex didn't have to make any investment decisions as she aged.
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That was all taken care of for her by sophisticated investment professionals.
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Her main goal was to save enough to maintain her standard of living in retirement and build a fulfilling life while Fidelity managed her investments aiming to grow and to protect her savings in an age-appropriate way.
Picking the right target date fund is a key decision in building a strong financial foundation for your future. By selecting a fund that aligns with your retirement timeline, you can help ensure your investments are managed appropriately through each stage of your career and beyond.
ClearPath Portfolios are conveniently available in five-year increments up to 2065, in either mutual fund or institutional portfolios. Fidelity’s glide path considers a plan member’s whole life and balances return needs with appropriate risk management through both the savings and retirement periods. Asset allocation is adjusted over time to become more conservative as members approach their target date.
Graph for illustrative purposes only. Age examples shown are for illustrative purposes only and do not reflect the full line of strategies. Allocation percentages may not add up to 100% due to rounding and/or cash balances. Target allocations for the Fidelity ClearPath Institutional Portfolios will vary from this approximate illustration.
Our target date portfolio managers are passionate about helping you maintain your standard of living in retirement. They are backed by a world-class research and investment management organization with the skills of over 500 research professionals located around the globe.*
Fidelity brings over 75 years of experience helping investors achieve their goals.
* As at December 31, 2025
Among the variety of investment choices your plan sponsor offers, target date strategies can provide you with simplicity, diversification and ongoing professional management – all in a single investment solution.
Visit your employer group plan's website to learn more about your investment options.
