The reality that Baby Boomers are beginning to retire is setting in at mutual fund companies, prompting many to turn their attention to younger generations, The Boston Globe reports.

Those between the ages of 40 to 59, which is considered the key demographic target for fund companies looking to reach people interested in saving for retirement, is currently 83 million, a 51% increase from 1992. But by 2020, that age group will increase by only 1%.

As a result, that is prompting many fund companies to devise marketing plans specifically targeted at younger investors, and to lower their minimum initial investments. Charles Schwab, for instance, replaced the $2,500 minimum for brokerage accounts and $2,000 for IRAs with a $1,000 requirement, or a commitment to automatically invest $100 a month.

American Century has its “My [Whatever] Plan,” also aimed at young investors looking to save not just for retirement but for other goals, such as a car or home. It has a $500 minimum initial requirement as long as investors commit to contribute $100 a month until it reaches a $2,500 minimum.

“What we see is the long-term potential in these kinds of customers,” said Steve McClaim, vice president of marketing at American Century. “We’d rather start his now rather than wait until they’re 45 because relationships are important.”

For its part, Fidelity is promoting its target-date funds to younger investors, with their convenient “set it and forget it” functions.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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