Both Retirement Funds and Target Retirement Funds, commonly known as T. Rowe Price target date funds, are designed for investors who want to save for retirement, but there are some important distinctions between them.

Key Differences
 

Retirement
Funds

Target Retirement
Funds

For investors who...    
Volatility Are willing to accept periods of higher short-term volatility in exchange for higher potential long-term growth Are willing to accept lower potential long-term growth in exchange for lower expected short-term volatility
Withdrawal Time Horizon Plan to spend their retirement savings down over a longer post-retirement withdrawal horizon Plan to spend their retirement savings down over a moderate post-retirement withdrawal horizon
Equity allocation differences...    
35 years to the target retirement date
(approximately 30 years old)
90% 86.5%
25 years to the target retirement date
(approximately 40 years old)
90% 77.5%
At target retirement date
(approximately 65 years old)
55% 42.5%
20 years after the target retirement date
(approximately 85 years old)
31% 31%

Retirement investment comparison between Target Retirement Funds and Retirement Funds.

T. Rowe Price analysis has shown that keeping a significant allocation to stocks in your portfolio over time may improve your chances of having the money you need in retirement. Over time, we decrease the allocation to stocks so that by the time the fund hits its target date, a higher percentage of fund assets will be allocated to bonds. The way the funds change gradually over time is called the glide path.

The principal value of the Retirement Funds and Target Retirement Funds (collectively the "target date funds") is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund. If an investor plans to retire significantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date. The target date funds' allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. The Retirement Funds emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long-term retirement withdrawal horizon. The Target Retirement Funds emphasize asset accumulation prior to retirement, balance the need for reduced market risk and income as retirement approaches, and focus on supporting an income stream over a moderate post-retirement withdrawal horizon. The target date funds are not designed for a lump sum redemption at the target date and do not guarantee a particular level of income. The key difference between the Retirement Funds and the Target Retirement Funds is the overall allocation to equity; although they each maintain significant allocations to equities both prior to and after the target date, the Retirement Funds maintain a higher equity allocation, which can result in greater volatility over shorter time horizons.