From Greg Jennings of OMC Finanacial Services:

If you have a retirement plan such as a 401(k) chances are you've come across “Target-Date funds.”  Also known as “Age-Based funds” or “Lifecycle funds”, these funds are often marketed as a “one-stop shop.”

Basically, these funds are a mix of underlying stock and bond funds that are classified by the year of retirement.  For example a “2020” fund assumes the investor will be retiring in 2020, a “2030” fund assumes the investor will be retiring in 2030 and so on. 

Each fund starts with a set mix, or asset allocation, of stock and bond funds and adjusts that allocation as the target date approaches, generally by decreasing the amount allocated to stock investments and increasing the amount allocated to bond investments. 

While these funds have their marketing appeal, there are several points to consider.  Among them are:

>>Not all funds with similar target dates have similar asset allocations, in fact they can vary a great deal
     *Underlying stock and/or bond funds may vary by size, country, type, etc.

>>Not all funds adjust their allocations the same way

>>These funds make adjustments based on time only and ignore economic conditions, political events, tax law changes, interest rate trends, etc.

>>Whether there are investments outside of these funds
      *An investor's overall asset allocation may be thrown off

>>The concept is still fairly new and these funds are still a “work in progress”
      *After reviewing fund performance in 2008 several funds adjusted the asset allocation for all of their funds going forward

The one size fits all approach isn't always the right approach.  Do your homework or consult your investment advisor before using these funds.