The fund is a target date fund that includes a managed payout program to provide shareholders with a regular level of monthly income each calendar year in the form of a dividend distribution. It can also be referred to as a managed payout fund. The Retirement Income 2020 Fund seeks to provide monthly income to investors in retirement.
The principal value of the fund 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 fund may not be an appropriate investment even if the investor is retiring on or near the target date. The fund’s allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. Diversification cannot assure a profit or protect against loss in a declining market. The fund emphasizes potential capital appreciation during the early phases of retirement asset accumulation, balances the need for appreciation with the need for income as retirement approaches, and focuses on supporting an income stream over a long-term postretirement withdrawal horizon. The fund is not designed for a lump-sum redemption at the target date and does not guarantee a particular level of income. The fund maintains a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons. There is no guarantee that the fund will provide adequate income at and through your retirement. The fund’s monthly cash distributions will reduce the amount of assets available for investment by the fund. In certain years, achieving the targeted annual payout rate through twelve equal monthly dividend payments may result in a drawdown on investment principal and some distributions may be treated in part as a return of capital. For all of these reasons, there is no guarantee of principal for investors and no guarantee that the fund will provide a fixed or stable level of cash distributions at any time or over any particular period of time. Any fund redemptions, including redemptions made prior to the target date, will proportionately reduce the amount of future cash distributions to be received from the fund.