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8 Top T. Rowe Price Funds for Retirement

Rebecca Lake

These funds are attractive in the retirement investing space.

Investors appear to be keeping a keen eye on market volatility and making strategic moves with their retirement accounts. T. Rowe Price funds are one option that retirement savers may contemplate as they make portfolio adjustments. "T. Rowe Price has had a very successful track record in the retirement investing space with their current crop of funds designed for corporate retirement plans," says Henry Wong, senior vice president and registered representative at Catalina Wealth Management in Tucson, Arizona. Wong says the company's target-date funds may be especially appealing for growth-oriented investing. Here are eight T. Rowe Price mutual funds are worth considering for retirement.

T. Rowe Price Retirement Fund 2020 (ticker: TRRBX)

Wong says TRRBX could be a good fit for near-retirees who have a "set it and forget it" mentality. TRRBX has a five-star Morningstar rating with a 10-year average annual return of 8.4 percent and a glide path that puts equity allocation at 40 percent after 10 years of retirement. But that may be a downside, says Matt Hylland, founder of Hylland Capital Management in North Liberty, Iowa. "That conservative of an allocation may be suitable for some investors, but in an age of low bond interest rates, that may leave them with a portfolio unable to produce enough growth to retire comfortably," he says. TRRBX has a 0.61 percent expense ratio.

T. Rowe Price Retirement 2030 Fund (TRRCX)

TRRCX is a target-date fund which may be appropriate for near-retirees who are heading into the home stretch of asset accumulation. Like the 2020 fund, it follows a similar glide path in transitioning out of equities and into fixed income and boasts a five-star Morningstar rating. With a 10-year average annual total return of 11.09 percent, it's shown itself to be a consistent performer and it has a lower expense ratio compared with some of the other target-date T. Rowe Price funds. Hylland says near-retirees should consider how the fund's current and future allocations align with their goals to ensure that it "has the potential to produce enough returns."

T. Rowe Price Retirement 2045 Fund (RRTRX)

RRTRX is currently a growth-focused fund with U.S. equities accounting for about 55 percent of its total asset allocation. The fund invests in several T. Rowe Price funds, including mid-cap and emerging market funds, says Steve Azoury, owner of Azoury Financial in Troy, Michigan, potentially appealing to midlife investors in their late 30s or early 40s who are less risk averse. The fund is down 11.3 percent over the last three months, but it still boasts an 11.06 percent 10-year average annual return. Cost-wise, RRTRX carries an above average expense ratio of 1.22 percent, which should be weighed carefully against potential future earnings.

T. Rowe Price Blue Chip Growth Fund (TRBCX)

Investors looking for target-date fund alternatives may want to consider TRBCX for long-term growth investing. "I personally like the blue-chip fund over target funds," Azoury says, citing the bond allocations within T. Rowe Price's target-date fund offerings. "The bonds, while safer, have hurt the returns, and the bonds have a degree of risk in interest rates rising." TRBCX is a large-growth fund with about 93 percent of assets concentrated in domestic stocks, primarily in technology. Amazon.com (AMZN) is the largest single stock concentration and the tech sector represents 29.28 percent of its holdings. That may raise concerns over volatility and risk for some investors, given the bumpy ride for FANG stocks in recent months.

T. Rowe Price Growth Stock Fund (PRGFX)

PRGFX is another large-growth T. Rowe Price fund with investments concentrated in companies that have demonstrated superior earnings growth along with the ability to sustain earnings momentum when the economy slows and the capacity to expand during a slowdown. Azoury says PRGFX can be an excellent way to invest for retirement since the fund gives investors "growth for the future without the wild swings of international or emerging stock funds." Amazon and technology also dominate this fund, but stocks in the consumer discretionary and health care sectors have a healthy representation. Microsoft Corp. (MSFT) and Visa (V) are among the fund's biggest detractors.

T. Rowe Price Mid-Cap Growth Fund (RPTIX)

Mid-cap companies can sometimes prove more volatile than large-cap stocks, as they move beyond the growing pains of the startup phase. But these companies can have enormous growth potential. Wong likes RPTIX for its strong performance record, and the fund features a diverse array of holdings. The largest is aircraft manufacturer Textron (TXT), and the bulk of the fund is focused on industrials and the technology sector. Microchip Technology (MCHP) currently represents the fund's biggest drain on performance, since the China trade policy agenda casts a shadow over the semiconductor industry.

T. Rowe Price Growth and Income Fund (TGTIX)

TGTIX could be a good complement to one of T. Rowe Price's retirement target-date funds, depending on an investor's age and risk preference. "Blending a target-date fund with other assets, such as Standard and Poor's 500 fund or another growth-oriented fund would allow for a deeper level of diversification," Wong says. TGTIX is positioned for capital appreciation. While its largest holding is Microsoft, health care is the largest represented sector overall. The 10-year average annual return is respectable at 12.86 percent. Among the T. Rowe Price mutual funds included here, it has the lowest expense ratio at 0.58 percent.

T. Rowe Price New Horizons Fund (PRNHX)

PRNHX is different from other T. Rowe Price funds, in that the fund is directed toward up-and-comers and smaller emerging growth companies. The fund includes brands, such as Vail Resorts (MTN) and Bright Horizons Family Solutions (BFAM). PRNHX may be more attractive for retirement investing when there's a longer runway to allow for growth. Its annual return for 2018 was 4.04 percent, outpacing the fund's benchmark -- the Russell 2000 Growth Index -- which dropped 9.31 percent last year. PRNHX is another fund with heavy concentration in the technology sector, including newer companies. That could make it lean more toward the speculative side compared with other T. Rowe Price funds -- something retirement investors may want to note.

Top-rated T. Rowe Price funds for retirement savers

To recap, these eight T. Rowe Price funds may be a good option for retirement portfolios:

-- Retirement 2020 Fund (TRRBX)

-- Retirement 2030 Fund (TRRCX)

-- Retirement 2045 Fund (RRTRX)

-- Blue Chip Growth Fund (TRBCX)

-- Growth Stock Fund (PRGFX)

-- Mid-Cap Growth Fund I Class (RPTIX)

-- Growth and Income Fund I Class (TGTIX)

-- New Horizons Fund (PRNHX)



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