N-CSR 1 a_retirementready1.htm PUTNAM RETIREMENT READY FUNDS 2_48P_item1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: (811- 21598 )

Exact name of registrant as specified in charter: Putnam RetirementReady Funds

Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109

Name and address of agent for service:  Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:  John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  One International Place 
  Boston, Massachusetts 02110 
 
Registrant’s telephone number, including area code:  (617) 292-1000 

Date of fiscal year end: July 31, 2006

Date of reporting period: August 1, 2005—January 31, 2006

Item 1. Report to Stockholders:

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:


What makes Putnam different?


In 1830, Massachusetts Supreme Judicial Court Justice Samuel Putnam established The Prudent Man Rule, a legal foundation for responsible money management.

THE PRUDENT MAN RULE

All that can be required of a trustee to invest is that he shall conduct himself faithfully and exercise a sound discretion. He is to observe how men of prudence, discretion, and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested.


A time-honored tradition in money management

Since 1937, our values have been rooted in a profound sense of responsibility for the money entrusted to us.

A prudent approach to investing

We use a research-driven team approach to seek consistent, dependable, superior investment results over time, although there is no guarantee a fund will meet its objectives.

Funds for every investment goal

We offer a broad range of mutual funds and other financial products so investors and their financial representatives can build diversified portfolios.

A commitment to doing what’s right for investors

We have below-average expenses and stringent investor protections, and provide a wealth of information about the Putnam funds.

Industry-leading service

We help investors, along with their financial representatives, make informed investment decisions with confidence.

Putnam
RetirementReady®
Funds

1| 31| 06
Semiannual Report

Message from the Trustees  2 
About the fund  4 
Report from the fund managers  7 
Performance  12 
Expenses  20 
Your fund’s management  23 
Terms and definitions  24 
Trustee approval of management contract  26 
Other information for shareholders  30 
Financial statements  31 
Brokerage commissions  100 

Message from the Trustees

Dear Fellow Shareholder

The performance of U.S. financial markets in the early weeks of 2006 suggests that investors remain generally optimistic this year. Stocks have advanced briskly while bonds have remained subdued. We consider these results typical of an expanding economy capable of generating both profits and inflation. As is often the case, the fundamental data painted a more conflicted picture than the market’s movements. In the final months of 2005, the economic growth rate slipped to a low level of 1.1%, according to initial estimates. Nevertheless, labor market conditions have strengthened, and energy prices, though elevated, did not spike in the winter months, thanks in part to mild winter weather in many regions of the country. Inflationary pressures remain contained, to borrow the terminology of the U.S. Federal Reserve Board (the Fed). At its January 31 meeting, marking the end of former Chairman Alan Greenspan’s 18 years of service, the Fed again raised interest rates, but hinted that the end of this tightening cycle might not be far away. Whatever the course the economy and monetary policy take in coming months, in our view it is fortunate that the Fed’s new Chairman, Ben Bernanke, like his predecessor, regards the Fed’s role in pursuing both price stability and economic growth as essential to encouraging investment.

Although there is no guarantee a fund will achieve its objectives, we believe that the professional research, diversification, and active management that mutual funds provide continue to make them an intelligent choice for investors. We want you to know that Putnam Investments, under the leadership of Chief Executive Officer Ed Haldeman, continues to focus on delivering consistent, dependable, superior investment performance over time.

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In the following pages, members of your fund’s management team discuss the fund’s performance and strategies, and their outlook for the months ahead. We thank you for your support of the Putnam funds.


Putnam RetirementReady Funds: offering one-step diversification that adjusts automatically over time

Unpredictable markets and the demands of a busy life can make it a challenge to monitor your retirement investments. Using a mix of investments can help you reduce risk and increase your exposure to opportunities in different markets — but it adds to the challenge of keeping your portfolio on track. Putnam RetirementReady Funds provide a one-step approach to investment diversification that gradually shifts toward a more conservative strategy to keep your risk exposure appropriate to your investment time horizon.

Each RetirementReady Fund invests in a combination of Putnam mutual funds to provide you with exposure to a variety of asset classes and investment styles. The RetirementReady Funds also have different target dates, indicating when investors expect to retire or otherwise begin withdrawing assets. The funds focus more heavily on aggressive, higher-risk investments when their target dates are far off, and emphasize more conservative, lower-risk investments when their target dates are near. Each fund’s asset allocation generally changes annually to become more conservative over time. The RetirementReady Maturity Fund, which focuses primarily on bonds and money market instruments, is designed for investors who are already retired or who expect to use the invested assets in the near future.


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While diversification can help protect your returns from excessive volatility, it can’t protect against market losses. However, by choosing a RetirementReady Fund based on the year you plan to start withdrawing assets — typically in retirement — you can get the advantages of diversification and pursue maximum returns while seeking to maintain a level of risk you are comfortable with — all in one convenient investment.

The funds invest in international investments, which involve risks such as currency fluctuations, economic instability, and political developments. The funds invest some or all of their assets in small and/or midsize companies. Such investments increase the risk of greater price fluctuations. The use of derivatives in some funds involves special risks and may result in losses.The funds also have a signifi-cant portion of their assets in bonds. Mutual funds that invest in bonds are subject to certain risks including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds have more exposure to interest-rate risk than short-term bonds. Lower-rated bonds may offer higher yields in return for more risk. Unlike bonds, bond funds have ongoing fees and expenses. Please see the prospectus for additional information about investment strategies and related risks of the underlying funds.

Money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency. Although Putnam Money Market Fund seeks to maintain a constant share price of $1.00, it is possible to lose money by investing in the fund.


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Putnam RetirementReady Funds (with the exception of the Maturity Fund) seek to provide a combination of capital appreciation and current income. The further away the fund’s target date, the greater the emphasis on capital appreciation; the closer the target date, the more emphasis is placed on current income. The Maturity Fund seeks as high a rate of current income as Putnam Management believes is consistent with preservation of capital, and this objective remains constant over time.

Performance                     
Total return for class A shares for periods ended 1/31/06           
 
  2050 Fund  2045 Fund  2040 Fund  2035 Fund  2030 Fund 
  NAV  POP  NAV  POP  NAV  POP  NAV  POP  NAV  POP 
 
Life of fund*  17.56%  11.38%  22.13%  15.72%  21.71%  15.31%  20.47%  14.14%  19.35%  13.09% 
Annual average  —  —  17.26  12.33  16.94  12.02  15.99  11.11  15.13  10.30 
1 year  —  —  14.94  8.91  14.67  8.64  13.84  7.86  13.10  7.17 
6 months  8.13  2.46  8.54  2.84  8.30  2.63  7.79  2.13  7.39  1.76 
  2025 Fund  2020 Fund  2015 Fund  2010 Fund  Maturity Fund 
  NAV  POP  NAV  POP  NAV  POP  NAV  POP  NAV  POP 
 
Life of fund*  18.15%  11.95%  15.68%  9.61%  12.78%  6.86%  8.60%  2.89%  6.27%  0.68% 
Annual average  14.21  9.41  12.30  7.58  10.05  5.43  6.79  2.29  4.97  0.54 
1 year  12.32  6.43  10.67  4.86  8.78  3.07  5.97  0.42  4.46  –1.01 
6 months  6.90  1.29  5.73  0.18  4.53  –0.96  2.89  –2.52  2.04  –3.32 

Data is historical. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate and you may have a gain or a loss when you sell your shares. Performance assumes reinvestment of distributions and does not account for taxes. Returns at NAV do not reflect a sales charge of 5.25% . For the most recent month-end performance, visit www.putnam.com. For a portion of the period, these funds limited expenses, without which returns would have been lower. A short-term trading fee of up to 2% may apply.

* With the exception of the 2050 Fund (inception: 5/2/05) the inception date of all share classes of the RetirementReady Funds is 11/1/04.

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Report from the fund managers

The period in review

In 2005, financial markets continued to trend away from U.S. dominance and move toward a more balanced global economy. Europe, Japan, China, India, and emerging markets all contributed significantly to demand for goods and services, and spurred economic growth worldwide. The U.S. Federal Reserve Board (the Fed) maintained its tightening policy throughout 2005 and raised the federal funds rate once again in January 2006. Other central banks did not raise rates as consistently. As a result, U.S. interest rates became more attractive in a global context. This helped explain the surprising strength of the U.S. dollar versus other currencies, and created a tailwind for financial and monetary conditions outside the United States. The asymmetry of monetary policies around the world reinforced the evolution toward a balanced global economy. All asset classes had positive returns for the period, but investors with the most broadly diversified portfolios were in the best position to reap the market’s gains.

Market overview: Equities

In a global context, U.S. stocks finished in the middle of the pack for the semi-annual period. Overall, Putnam Management believes U.S. stock valuations are more attractive than they were at the beginning of the period. Investing styles seemed to have little impact on results, as growth and value stocks performed quite similarly in every capitalization range. Small-capitalization stocks had been leading the market for an extended period, but mid-cap stocks edged ahead in 2005, and as 2006 began, Putnam Management believed that large-cap stocks were poised to move into a more dominant position. The real story was not about style or capitalization, but sectors. Energy outpaced all other sectors. Robust economic growth in China, India, and emerging markets created heavy demand for natural resources. Energy

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companies realized huge earnings and profits, and energy stocks appreciated accordingly. The utilities sector also benefited from this trend.

Stocks in international markets were far and away the best-performing asset class in 2005, even after factoring in the weakness of foreign currencies versus the U.S. dollar. They appear to be on track to outperform in 2006. Economic growth outside of the United States outpaced domestic growth as most markets reflected the surprising strength of both the European and Japanese economies. Japan is benefiting from the tremendous growth in China and emerging markets in Asia. Its geographical proximity to these countries is a boon to Japanese prosperity.

Market overview: Fixed Income

The strength and resilience of the U.S. economy helped lift yields on long-term bonds, but not enough to keep pace with the consistent rise in short-term yields, which was the result of the Fed’s tightening policy. As a result, the yield curve, which graphically illustrates the difference in yields of bonds along the maturity spectrum, flattened. This meant that the incremental reward to investors for accepting the risk of borrowing longer-term was diminished to near zero. This trend kept U.S. bond market returns subdued and no particular sector offered standout performance. We believe that a flat yield curve is indicative of a constrained liquidity environment. In our view, this may

Market sector performance   
These indexes provide an overview of performance in different market sectors for the   
six months ended 1/31/06.   
 
Equities   
S&P 500 Index (broad stock market)  4.68% 
MSCI EAFE Index (international stocks)  18.31% 
Russell 1000 Index (large-company stocks)  5.04% 
Russell 2000 Index (small-company stocks)  8.50% 
Bonds   
Lehman Aggregate Bond Index (broad bond market)  0.84% 
Lehman Credit Index (corporate bonds)  0.29% 
JP Morgan Developed High Yield Index (high-yield corporate bonds)  1.62% 

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not bode well for investment-grade corporate bonds going forward.

Foreign bond markets outperformed U.S. bonds. Most of that outperformance occurred during the first half of 2005. Falling interest rates in Japan and Germany lifted bond prices, while in regions with more stable interest rates, low inflation and higher yields attracted investors. Currency exchange rates made a difference for bond investors. The U.S. dollar appreciated significantly versus other currencies and eroded some of the value of unhedged foreign bonds.

The underlying Putnam funds can invest in international investments, which involve risks such as currency fluctuations, economic instability, and political developments. The underlying Putnam funds can invest some or all of their assets in small and/or midsize companies and such investments increase the risk of greater price fluctuations. The use of derivatives in some funds involves special risks and may result in losses. The underlying Putnam funds can also have a significant portion of their holdings in bonds. Mutual funds that invest in bonds are subject to certain risks, including interest-rate risk, credit risk, and inflation risk. As interest rates rise, the prices of bonds fall. Long-term bonds have more exposure to interest-rate risk than short-term bonds. Lower-rated bonds may offer higher yields in return for more risk. Unlike bonds, bond funds have ongoing fees and expenses. These risks apply to any underlying Putnam fund with a significant portion of its assets invested in bonds.

The outlook for your fund
The following commentary reflects anticipated developments that could affect your fund over the next six months, as well as your management team’s plans for responding to them.

Putnam Management believes that international stocks remain more attractively valued than domestic stocks, and the factors that would lead to economic outperformance abroad are still intact. However, because foreign stocks appreciated so strongly in 2005, they are no longer favored to the same extent. Also, the European Central Bank (ECB) began to raise short-term interest rates in late 2005, finally joining the U.S. in assuming a tightening stance. As a result, the greater liquidity that has been an advantage for European markets may become less prominent in 2006.

The views expressed in this report are exclusively those of Putnam Management. They are not meant as investment advice.

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Composition of the funds’

Underlying investments

Each Putnam RetirementReady Fund invests, to varying degrees, in a variety of Putnam mutual funds. This section describes the goals and strategies of the underlying Putnam funds.

Putnam Voyager Fund

The fund seeks capital appreciation by investing primarily in growth stocks of midsize and large U.S. companies. Growth stocks are issued by companies that Putnam believes are fast-growing and whose earnings Putnam believes are likely to increase over time. Growth in earnings may lead to an increase in the price of the stock. The fund invests mainly in midsize and large companies, although it can invest in companies of any size.

The Putnam Fund for Growth and Income

The fund seeks capital growth and current income by investing primarily in common stocks of large U.S. companies, with a focus on value stocks that offer the potential for capital growth, current income, or both. Value stocks are stocks that Putnam believes are currently undervalued by the market. The fund’s management team looks for companies undergoing positive change. If the team is correct and other investors recognize the value of the company, the price of the stock may rise.

Putnam Capital Opportunities Fund

The fund seeks long-term growth of capital by investing primarily in common stocks of small and midsize U.S. companies that Putnam believes have favorable investment potential. For example, the fund may purchase stocks of companies whose stock price is lower than the value Putnam places on the company. The fund may also consider other factors that Putnam believes will cause the stock price to rise.

Putnam International Equity Fund

The fund seeks capital appreciation by investing primarily in common stocks of companies outside the United States that Putnam believes have favorable investment potential. For example, the fund may purchase stocks of companies whose stock price is lower than the value Putnam places on the company.

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The fund may also consider other factors that Putnam believes will cause the stock price to rise. The fund invests mainly in midsize and large companies, although it can invest in companies of any size. Although the fund emphasizes investments in developed countries, it may also invest in companies located in emerging markets.

Putnam Income Fund

The fund seeks high current income consistent with what Putnam believes to be prudent risk. The fund invests mainly in bonds that are obligations of companies and governments worldwide denominated in U.S. dollars, are either investment-grade or below investment-grade (sometimes referred to as “junk bonds”), and have intermediate-to long-term maturities (three years or longer).

Putnam Money Market Fund

The fund seeks as high a rate of current income as Putnam Management believes is consistent with preservation of capital and maintenance of liquidity. The fund invests mainly in instruments that are high quality and have short-term maturity.

Money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency. Although the fund seeks to maintain a constant share price of $1.00, it is possible to lose money by investing in the fund.

Allocations by fund as of 1/31/06         
Percentages based on market value. Portfolio composition will vary over time.   
Due to rounding, percentages may not equal 100%.       
 
  The Putnam  Putnam Capital  Putnam  Putnam  Putnam  Putnam 
  Fund for Growth  Opportunities  International  Voyager  Income  Money Market 
RetirementReady Fund  and Income  Fund  Equity Fund  Fund  Fund  Fund 
 
2050 Fund  23.5%  15.1%  30.5%  23.6%  3.6%  3.7% 
2045 Fund  24.5%  15.5%  30.7%  24.4%  3.9%  0.9% 
2040 Fund  23.6%  14.5%  29.7%  23.5%  5.8%  2.9% 
2035 Fund  23.6%  13.5%  26.7%  22.6%  9.7%  3.9% 
2030 Fund  21.7%  12.5%  25.8%  21.6%  13.6%  4.8% 
2025 Fund  20.8%  11.5%  23.8%  20.7%  15.6%  7.8% 
2020 Fund  19.9%  10.5%  16.6%  19.8%  23.5%  9.8% 
2015 Fund  17.0%  10.5%  9.4%  16.9%  30.4%  15.8% 
2010 Fund  12.1%  6.4%  3.2%  12.0%  40.6%  25.8% 
Maturity Fund  10.1%  5.3%  —  10.0%  44.6%  29.9% 

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Your fund’s performance

This section shows your fund’s performance during the first half of its fiscal year, which ended January 31, 2006. In accordance with regulatory requirements for mutual funds, we also include performance for the most recent calendar quarter-end. Performance should always be considered in light of a fund’s investment strategy. Data represents past performance. Past performance does not guarantee future results. More recent returns may be less or more than those shown. Investment return and principal value will fluctuate, and you may have a gain or a loss when you sell your shares. For the most recent month-end performance, please visit www.putnam.com or call Putnam at 1-800-225-1581. Class Y shares are generally only available to corporate and institutional clients. See the Terms and Definitions section in this report for definitions of the share classes offered by your fund.

Fund performance                 
Total return for periods ended 1/31/06               
 
  Class A    Class B    Class C    Class M    Class R  Class Y 
(inception dates)  (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)  (11/1/04) 
  NAV  POP  NAV  CDSC  NAV  CDSC  NAV  POP  NAV  NAV 
2050 Fund*                     
Life of fund  17.56%  11.38%  16.90%  11.90%  16.90%  15.90%  17.10%  13.30%  17.33%  17.78% 
6 months  8.13  2.46  7.74  2.74  7.74  6.74  7.87  4.37  8.00  8.29 
2045 Fund†                     
Life of fund  22.13  15.72  20.98  16.98  20.98  20.98  21.37  17.43  21.77  22.50 
Annual average  17.26  12.33  16.38  13.30  16.38  16.38  16.68  13.66  16.99  17.54 
1 year  14.94  8.91  14.08  9.07  14.08  13.08  14.37  10.66  14.67  15.22 
6 months  8.54  2.84  8.15  3.15  8.13  7.13  8.28  4.76  8.41  8.67 
2040 Fund†                     
Life of fund  21.71  15.31  20.57  16.57  20.58  20.58  20.94  17.01  21.37  22.09 
Annual average  16.94  12.02  16.07  12.99  16.08  16.08  16.35  13.33  16.68  17.23 
1 year  14.67  8.64  13.81  8.81  13.83  12.83  14.10  10.40  14.43  14.96 
6 months  8.30  2.63  7.89  2.89  7.89  6.89  8.03  4.52  8.18  8.46 
2035 Fund                     
Life of fund  20.47  14.14  19.35  15.35  19.35  19.35  19.71  15.82  19.97  20.84 
Annual average  15.99  11.11  15.13  12.05  15.13  15.13  15.41  12.41  15.61  16.28 
1 year  13.84  7.86  12.99  7.99  12.99  11.99  13.25  9.57  13.44  14.11 
6 months  7.79  2.13  7.38  2.38  7.38  6.38  7.51  4.01  7.53  7.93 
2030 Fund                     
Life of fund  19.35  13.09  18.23  14.23  18.22  18.22  18.60  14.74  18.96  19.70 
Annual average  15.13  10.30  14.27  11.18  14.26  14.26  14.56  11.58  14.83  15.40 
1 year  13.10  7.17  12.26  7.26  12.25  11.25  12.55  8.88  12.80  13.39 
6 months  7.39  1.76  6.96  1.96  6.96  5.96  7.10  3.61  7.21  7.51 

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Fund performance (Continued)               
Total return for periods ended 1/31/06               
 
  Class A    Class B    Class C    Class M    Class R  Class Y 
(inception dates)  (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)  (11/1/04) 
  NAV  POP  NAV  CDSC  NAV  CDSC  NAV  POP  NAV  NAV 
2025 Fund                     
Life of fund  18.15%  11.95%  17.05%  13.05%  17.03%  17.03%  17.41%  13.60%  17.79%  18.51% 
Annual average  14.21  9.41  13.36  10.26  13.35  13.35  13.64  10.69  13.93  14.49 
1 year  12.32  6.43  11.48  6.48  11.46  10.46  11.76  8.12  12.04  12.60 
6 months  6.90  1.29  6.50  1.50  6.50  5.50  6.62  3.16  6.78  7.04 
2020 Fund                     
Life of fund  15.68  9.61  14.59  10.59  14.57  14.57  14.96  11.22  15.40  16.04 
Annual average  12.30  7.58  11.46  8.35  11.45  11.45  11.75  8.84  12.08  12.58 
1 year  10.67  4.86  9.85  4.85  9.83  8.83  10.13  6.55  10.48  10.96 
6 months  5.73  0.18  5.33  0.33  5.32  4.31  5.48  2.03  5.62  5.87 
2015 Fund                     
Life of fund  12.78  6.86  11.75  7.75  11.74  11.74  12.10  8.46  12.51  13.14 
Annual average  10.05  5.43  9.25  6.12  9.25  9.25  9.52  6.68  9.84  10.34 
1 year  8.78  3.07  7.96  2.96  7.95  6.95  8.22  4.71  8.55  9.05 
6 months  4.53  –0.96  4.15  –0.77  4.12  3.13  4.26  0.87  4.42  4.66 
2010 Fund                     
Life of fund  8.60  2.89  7.61  3.61  7.61  7.61  7.96  4.46  8.33  8.95 
Annual average  6.79  2.29  6.01  2.86  6.02  6.02  6.29  3.53  6.58  7.07 
1 year  5.97  0.42  5.19  0.19  5.21  4.21  5.49  2.06  5.78  6.25 
6 months  2.89  –2.52  2.50  –2.45  2.51  1.52  2.64  –0.70  2.78  3.01 
Maturity Fund                     
Life of fund  6.27  0.68  5.27  1.27  5.32  5.32  5.61  2.16  5.96  6.59 
Annual average  4.97  0.54  4.18  1.01  4.21  4.21  4.44  1.72  4.72  5.22 
1 year  4.46  –1.01  3.70  –1.30  3.72  2.72  3.94  0.55  4.22  4.71 
6 months  2.04  –3.32  1.66  –3.29  1.67  0.68  1.77  –1.53  1.91  2.16 

Performance assumes reinvestment of distributions and does not account for taxes. Returns at public offering price (POP) for class A and M shares reflect a sales charge of 5.25% and 3.25%, respectively. Class B share returns reflect the applicable contingent deferred sales charge (CDSC), which is 5% in the first year, declining to 1% in the sixth year, and is eliminated thereafter. Class C shares reflect a 1% CDSC the first year that is eliminated thereafter. Class R and Y shares have no initial sales charge or CDSC.

For a portion of the period, these funds limited expenses, without which returns would have been lower. A 2% short-term trading fee may be applied to shares exchanged or sold within 5 days of purchase.

* The inception date of Putnam RetirementReady 2050 Fund is 5/2/05, for all share classes.

† Because no class R shares of the fund were outstanding on 12/20/05 and 12/21/05, class R performance for the period from 12/19/05 to 12/21/05 is based on class A performance, adjusted for the applicable sales charge and the higher operating expenses for class R shares.

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Comparative index returns     
For periods ended 1/31/06     
 
  S&P 500  Lehman Aggregate 
  Index  Bond Index 
 
Life of fund*  15.86%  2.55% 
Annual average  12.50  2.04 
1 year  10.38  1.80 
6 months  4.68  0.84 

Index results should be compared to fund performance at net asset value.

* Life-of-fund period begins at 11/1/04, the inception date of all the Putnam RetirementReady Funds with the exception of the 2050 Fund (inception: 5/2/05).

Fund price and distribution information

For the six-month period ended 1/31/06

  Class A  Class B  Class C  Class M  Class R  Class Y 
2050 Fund             
Distributions*             
(number)  1  1  1  1  1  1 
Income  $0.803  $0.524  $0.504  $0.591  $0.665  $0.842 
Capital gains             
Long-term  —  —  —  —  —  — 
Short-term  0.931  0.931  0.931  0.931  0.931  0.931 
Total  $1.734  $1.455  $1.435  $1.522  $1.596  $1.773 
Share value:  NAV   POP NAV  NAV  NAV   POP NAV  NAV 
7/31/05  $54.36 $57.37  $54.25  $54.25  $54.28 $56.10  $54.32  $54.38 
1/31/06  57.00 60.16  56.96  56.98  56.99 58.90    57.03  57.07 
 
  Class A  Class B  Class C  Class M  Class R†  Class Y 
2045 Fund             
Distributions*             
(number)  1  1  1  1  —  1 
Income  $1.200  $0.910  $0.630  $0.807  —  $1.329 
Capital gains             
Long-term  —  —  —  —  —  — 
Short-term  2.516  2.516  2.516  2.516  —  2.516 
Total  $3.716  $3.426  $3.146  $3.323  —  $3.845 
Share value:  NAV  POP  NAV  NAV  NAV  POP  NAV  NAV 
7/31/05  $70.75 $74.67  $68.83  $68.84  $68.94 $71.26  $69.06  $76.88 
1/31/06  72.98 77.02  70.92  71.21  71.24 73.63  74.46  79.60 

14

Fund price and distribution information (Continued)     
For the six-month period ended 1/31/06         
 
  Class A  Class B  Class C  Class M  Class R†  Class Y 
2040 Fund             
Distributions*             
(number)  1  1  1  1  —  1 
Income  $1.179  $0.798  $0.643  $0.834  —  $1.312 
Capital gains             
Long-term  —  —  —  —  —  — 
Short-term  2.686  2.686  2.686  2.686  —  2.686 
Total  $3.865  $3.484  $3.329  $3.520  —  $3.998 
Share value:  NAV POP  NAV  NAV  NAV   POP NAV  NAV 
7/31/05  $70.81 $74.73  $68.82  $68.83  $68.88 $71.19  $69.04  $76.67 
1/31/06  72.73 76.76  70.68  70.85  70.80 73.18    74.28  79.05 
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2035 Fund             
Distributions*             
(number)  1  1  1  1  1  1 
Income  $1.250  $1.081  $0.734  $0.970  —  $1.389 
Capital gains             
Long-term  0.017  0.017  0.017  0.017  0.017  0.017 
Short-term  2.628  2.628  2.628  2.628  2.628  2.628 
Total  $3.895  $3.726  $3.379  $3.615  $2.645  $4.034 
Share value:  NAV POP  NAV  NAV  NAV   POP NAV  NAV 
7/31/05  $69.50 $73.35  $67.35  $67.41  $67.47 $69.74  $67.61  $75.37 
1/31/06  70.93 74.86  68.51  68.93  68.84 71.15  69.99  77.22 
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2030 Fund             
Distributions*             
(number)  1  1  1  1  1  1 
Income  $1.279  $0.976  $1.097  $1.052  $1.334  $1.416 
Capital gains             
Long-term  0.023  0.023  0.023  0.023  0.023  0.023 
Short-term  2.346  2.346  2.346  2.346  2.346  2.346 
Total  $3.648  $3.345  $3.466  $3.421  $3.703  $3.785 
Share value:  NAV  POP  NAV  NAV  NAV  POP  NAV  NAV 
7/31/05  $68.65 $72.45  $67.07  $67.06  $67.14 $69.40  $67.27  $73.90 
1/31/06  69.99 73.87  68.32  68.19  68.41 70.71  68.34  75.58 

15

Fund price and distribution information (Continued)     
For the six-month period ended 1/31/06         
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2025 Fund             
Distributions*             
(number)  1  1  1  1  1  1 
Income  $1.362  $1.087  $0.981  $1.103  $1.290  $1.511 
Capital gains             
Long-term  0.003  0.003  0.003  0.003  0.003  0.003 
Short-term  2.335  2.335  2.335  2.335  2.335  2.335 
Total  $3.700  $3.425  $3.319  $3.441  $3.628  $3.849 
Share value:  NAV   POP  NAV  NAV  NAV   POP NAV  NAV 
7/31/05  $72.26 $76.26    $69.94  $70.00  $70.06 $72.41    $70.21  $72.50 
1/31/06  73.47 77.54    70.99  71.16  71.19 73.58    71.27  73.67 
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2020 Fund             
Distributions*             
(number)  1  1  1  1  1  1 
Income  $1.323  $1.089  $0.990  $1.142  $1.424  $1.457 
Capital gains             
Long-term  0.004  0.004  0.004  0.004  0.004  0.004 
Short-term  1.717  1.717  1.717  1.717  1.717  1.717 
Total  $3.044  $2.810  $2.711  $2.863  $3.145  $3.178 
Share value:  NAV  POP  NAV  NAV  NAV  POP  NAV  NAV 
7/31/05  $66.06   $69.72 $64.94  $64.97  $65.05 $67.24  $65.23  $70.54 
1/31/06  66.75 70.45  65.55  65.67  65.70 67.91  65.70  71.45 
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2015 Fund             
Distributions*             
(number)  1  1  1  1  1  1 
Income  $1.602  $1.398  $1.392  $1.390  $1.686  $1.750 
Capital gains             
Long-term  0.003  0.003  0.003  0.003  0.003  0.003 
Short-term  2.430  2.430  2.430  2.430  2.430  2.430 
Total  $4.035  $3.831  $3.825  $3.823  $4.119  $4.183 
Share value:  NAV  POP  NAV  NAV  NAV   POP  NAV  NAV 
7/31/05  $67.28 $71.01  $66.27  $66.25  $66.38 $68.61  $66.54  $67.48 
1/31/06  66.24 69.91    65.14  65.11  65.34 67.53  65.31  66.39 

16

Fund price and distribution information (Continued)     
For the six-month period ended 1/31/06         
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2010 Fund             
Distributions*             
(number)  1  1  1  1  1  1 
Income  $1.520  $1.045  $1.346  $1.446  $1.600  $1.651 
Capital gains             
Long-term  0.015  0.015  0.015  0.015  0.015  0.015 
Short-term  1.000  1.000  1.000  1.000  1.000  1.000 
Total  $2.535  $2.060  $2.361  $2.461  $2.615  $2.666 
Share value:  NAV   POP NAV  NAV  NAV  POP  NAV  NAV 
7/31/05  $59.72 $63.03  $58.59  $58.62  $58.73 $60.70    $58.83  $62.35 
1/31/06  58.89 62.15  57.98  57.71  57.80 59.74  57.83  61.54 
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
Maturity Fund             
Distributions*             
(number)  6  6  6  6  6  6 
Income  $0.971  $0.749  $0.750  $0.826  $0.897  $1.043 
Capital gains             
Long-term  —  —  —  —  —  — 
Short-term  0.749  0.749  0.749  0.749  0.749  0.749 
Total  $1.720  $1.498  $1.499  $1.575  $1.646  $1.792 
Share value:  NAV   POP NAV  NAV  NAV POP  NAV  NAV 
7/31/05  $57.51 $60.70  $57.54  $57.56  $57.54 $59.47    $57.56  $57.65 
1/31/06  56.95 60.11    56.99  57.01  56.97 58.88  57.00  57.08 

* Dividend sources are estimated and may vary based on final tax calculations after the fund’s fiscal year-end.

† No class R shares were outstanding on the applicable distribution record date.

17

Fund performance for most recent calendar quarter       
Total return for periods ended 12/31/05               
 
  Class A    Class B    Class C    Class M    Class R  Class Y 
(inception dates)  (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)  (11/1/04) 
  NAV  POP  NAV  CDSC  NAV  CDSC  NAV  POP  NAV  NAV 
2050 Fund*                     
Life of fund  13.47%  7.52%  12.90%  7.90%  12.90%  11.90%  13.07%  9.40%  13.26%  13.65% 
6 months  8.42  2.73  8.00  3.00  8.00  7.00  8.12  4.60  8.23  8.55 
2045 Fund†                     
Life of fund  17.67  11.50  16.64  12.64  16.65  16.65  16.99  13.20  17.34  18.02 
Annual average  14.90  9.73  14.04  10.69  14.04  14.04  14.33  11.16  14.62  15.18 
1 year  8.04  2.37  7.21  2.21  7.22  6.22  7.48  3.99  7.76  8.30 
6 months  8.61  2.90  8.21  3.21  8.20  7.20  8.35  4.83  8.46  8.76 
2040 Fund†                     
Life of fund  17.47  11.30  16.46  12.46  16.46  16.46  16.79  13.00  17.14  17.81 
Annual average  14.73  9.57  13.88  10.53  13.88  13.88  14.16  10.99  14.45  15.01 
1 year  7.98  2.30  7.17  2.17  7.18  6.18  7.44  3.94  7.70  8.24 
6 months  8.53  2.83  8.11  3.11  8.10  7.10  8.25  4.73  8.37  8.65 
2035 Fund                     
Life of fund  16.58  10.46  15.57  11.57  15.58  15.58  15.90  12.13  16.11  16.91 
Annual average  13.98  8.85  13.14  9.79  13.15  13.15  13.41  10.26  13.59  14.26 
1 year  7.61  1.97  6.81  1.81  6.84  5.84  7.07  3.59  7.22  7.89 
6 months  8.04  2.36  7.64  2.64  7.64  6.64  7.76  4.26  7.76  8.19 
2030 Fund                     
Life of fund  15.69  9.62  14.68  10.68  14.68  14.68  15.01  11.27  15.34  16.01 
Annual average  13.24  8.15  12.40  9.04  12.40  12.40  12.68  9.54  12.95  13.51 
1 year  7.28  1.65  6.48  1.48  6.48  5.48  6.73  3.27  6.99  7.54 
6 months  7.55  1.90  7.13  2.13  7.15  6.15  7.28  3.79  7.38  7.68 
2025 Fund                     
Life of fund  14.78  8.75  13.77  9.77  13.77  13.77  14.12  10.41  14.45  15.10 
Annual average  12.48  7.42  11.63  8.28  11.64  11.64  11.92  8.81  12.20  12.75 
1 year  6.92  1.31  6.12  1.12  6.12  5.12  6.39  2.93  6.65  7.18 
6 months  7.07  1.46  6.65  1.65  6.67  5.67  6.80  3.34  6.94  7.20 
2020 Fund                     
Life of fund  12.96  7.03  11.97  7.97  11.98  11.98  12.30  8.64  12.73  13.29 
Annual average  10.95  5.97  10.12  6.76  10.13  10.13  10.41  7.33  10.76  11.23 
1 year  6.19  0.61  5.39  0.39  5.39  4.39  5.65  2.21  6.01  6.45 
6 months  6.05  0.49  5.64  0.64  5.65  4.65  5.78  2.34  5.96  6.18 

18

Fund performance for most recent calendar quarter (Continued)   
Total return for periods ended 12/31/05               
 
  Class A    Class B    Class C    Class M    Class R  Class Y 
(inception dates)  (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)    (11/1/04)  (11/1/04) 
  NAV  POP  NAV  CDSC  NAV  CDSC  NAV  POP  NAV  NAV 
2015 Fund                     
Life of fund  10.69%  4.87%  9.74%  5.74%  9.75%  9.75%  10.07%  6.50%  10.44%  11.03% 
Annual average  9.05  4.14  8.25  4.88  8.26  8.26  8.53  5.52  8.84  9.34 
1 year  5.30  –0.23  4.50  –0.43  4.51  3.52  4.76  1.35  5.06  5.57 
6 months  4.78  –0.72  4.39  –0.54  4.39  3.41  4.52  1.13  4.65  4.93 
2010 Fund                     
Life of fund  7.44  1.79  6.51  2.51  6.51  6.51  6.84  3.37  7.19  7.75 
Annual average  6.31  1.52  5.53  2.14  5.53  5.53  5.81  2.87  6.10  6.57 
1 year  4.07  –1.40  3.29  –1.70  3.28  2.29  3.56  0.20  3.87  4.31 
6 months  3.04  –2.36  2.65  –2.31  2.65  1.66  2.79  –0.55  2.94  3.16 
Maturity Fund                     
Life of fund  5.44  –0.11  4.52  0.52  4.55  4.55  4.84  1.42  5.17  5.76 
Annual average  4.63  –0.09  3.85  0.45  3.87  3.87  4.12  1.21  4.39  4.89 
1 year  3.25  –2.17  2.50  –2.47  2.51  1.52  2.77  –0.57  3.03  3.54 
6 months  1.95  –3.41  1.57  –3.37  1.57  0.58  1.70  –1.61  1.84  2.08 

* The inception date of Putnam RetirementReady 2050 Fund is 5/2/05, for all share classes.

† Because no class R shares of the fund were outstanding on 12/20/05 and 12/21/05, class R performance for the period from 12/19/05 to 12/21/05 is based on class A performance, adjusted for the applicable sales charge and the higher operating expenses for class R shares.

19

Your fund’s expenses

As a mutual fund investor, you pay ongoing expenses, such as management fees, distribution fees (12b-1 fees), and other expenses. In the most recent six-month period, your fund limited these expenses; had it not done so, expenses would have been higher. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You may also pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. Expense information also does not include the fees and expenses of the underlying Putnam mutual funds in which the RetirementReady Funds invest. For more information, see your fund’s prospectus or talk to your financial advisor.

Review your fund’s expenses

The first table in this section shows the expenses you would have paid on a $1,000 investment in each of the RetirementReady Funds from August 1, 2005, to January 31, 2006. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses. You may use the information in this table to estimate the expenses that you paid over the period. Simply divide your account value by $1,000, and then multiply the result by the number in the first line (“Expenses paid per $1,000”) for the class of shares you own.

  Class A  Class B  Class C  Class M  Class R  Class Y 
2050 Fund                         
Expenses paid per $1,000*  $  1.84   $  5.76  $  5.76  $  4.45  $  3.15  $  0.53 
Ending value (after expenses)  $1,081.30  $1,077.40  $1,077.40  $1,078.70  $1,080.00  $1,082.90 
2045 Fund                         
Expenses paid per $1,000*  $  1.84  $  5.77  $  5.77  $  4.46  $  3.14  $  0.53 
Ending value (after expenses)  $1,085.40  $1,081.50  $1,081.30  $1,082.80  $1,078.20  $1,086.70 
2040 Fund                         
Expenses paid per $1,000*  $  1.84  $  5.76  $  5.76  $  4.46  $  3.14  $  0.53 
Ending value (after expenses)  $1,083.00  $1,078.90  $1,078.90  $1,080.30  $1,075.90  $1,084.60 
2035 Fund                         
Expenses paid per $1,000*  $  1.83  $  5.75  $  5.75  $  4.45  $  3.14  $  0.52 
Ending value (after expenses)  $1,077.90  $1,073.80  $1,073.80  $1,075.10  $1,075.30  $1,079.30 
2030 Fund                         
Expenses paid per $1,000*  $  1.83  $  5.74  $  5.74  $  4.44  $  3.13  $  0.52 
Ending value (after expenses)  $1,073.90  $1,069.60  $1,069.60  $1,071.00  $1,072.10  $1,075.10 
2025 Fund                         
Expenses paid per $1,000*  $  1.83  $  5.73  $  5.73  $  4.43  $  3.13  $  0.52 
Ending value (after expenses)  $1,069.00  $1,065.00  $1,065.00  $1,066.20  $1,067.80  $1,070.40 
2020 Fund                         
Expenses paid per $1,000*  $  1.81  $  5.69  $  5.69  $  4.40  $  3.11  $  0.52 
Ending value (after expenses)  $1,057.30  $1,053.30  $1,053.20  $1,054.80  $1,056.20  $1,058.70 

20

Review your fund’s expenses (Continued)       
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2015 Fund             
Expenses paid per $1,000*  $ 1.80  $ 5.66  $ 5.66  $ 4.38  $ 3.09  $ 0.52 
Ending value (after expenses)  $1,045.30  $1,041.50  $1,041.20  $1,042.60  $1,044.20  $1,046.60 
2010 Fund             
Expenses paid per $1,000*  $ 1.79  $ 5.61  $ 5.61  $ 4.34  $ 3.07  $ 0.51 
Ending value (after expenses)  $1,028.90  $1,025.00  $1,025.10  $1,026.40  $1,027.80  $1,030.10 
Maturity Fund             
Expenses paid per $1,000*  $ 1.78  $ 5.59  $ 5.59  $ 4.32  $ 3.05  $ 0.51 
Ending value (after expenses)  $1,020.40  $1,016.60  $1,016.70  $1,017.70  $1,019.10  $1,021.60 

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of net assets for the six months ended 1/31/06. The expense ratio may differ for each share class (see the next table in this section). Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

Compare expenses using the SEC’s method

The Securities and Exchange Commission (SEC) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total costs) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

  Class A  Class B  Class C  Class M  Class R  Class Y 
2050 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%  0.10% 
2045 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 
2040 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 

21

Compare expenses using the SEC’s method (Continued)       
 
  Class A  Class B  Class C  Class M  Class R  Class Y 
2035 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 
2030 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 
2025 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 
2020 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 
2015 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 
2010 Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06  $  0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 
Maturity Fund                 
Expenses paid per $1,000*  $ 1.79  $  5.60  $ 5.60  $ 4.33  $ 3.06    $0.51 
Ending value (after expenses)  $1,023.44  $1,019.66  $1,019.66  $1,020.92  $1,022.18  $1,024.70 
Annualized expense ratio  0.35%    1.10%  1.10%  0.85%  0.60%    0.10% 

* Expenses for each share class are calculated using the fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of net assets for the six months ended 1/31/06. The expense ratio may differ for each share class. Expenses are calculated by multiplying the expense ratio by the average account value for the period; then multiplying the result by the number of days in the period; and then dividing that result by the number of days in the year.

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Your fund’s management

Your fund is managed by the members of the Global Asset Allocation Team. Jeffrey Knight is the Portfolio Leader, and Robert Kea and Robert Schoen are Portfolio Members. The Portfolio Leader and Portfolio Members coordinate the team’s management of the fund.

For a complete listing of the members of the Global Asset Allocation Team, including those who are not Portfolio Leaders or Portfolio Members of your fund, visit Putnam’s Individual Investor Web site at www.putnam.com.

Fund manager compensation

The total 2005 fund manager compensation that is attributable to the funds is approximately $310,000. This amount includes a portion of 2005 compensation paid by Putnam Management to the fund managers listed in this section for their portfolio management responsibilities, calculated based on the fund assets they manage taken as a percentage of the total assets they manage. The compensation amount also includes a portion of the 2005 compensation paid to the Chief Investment Officer of the team for his oversight responsibilities, calculated based on the fund assets he oversees taken as a percentage of the total assets he oversees. This amount does not include compensation of other personnel involved in research, trading, administration, systems, compliance, or fund operations; nor does it include non-compensation costs. These percentages are determined as of the funds’ fiscal period-end. For personnel who joined Putnam Management during or after 2005, the calculation reflects annualized 2005 compensation or an estimate of 2006 compensation, as applicable.

Other Putnam funds managed by the Portfolio Leader and Portfolio Members

Jeffrey Knight is also a Portfolio Leader of the Putnam Asset Allocation Funds: Growth, Balanced, and Conservative Portfolios, a Portfolio Leader of Putnam Income Strategies Fund, and a Portfolio Member of The George Putnam Fund of Boston.

Robert Kea and Robert Schoen are also Portfolio Members of the Putnam Asset Allocation Funds: Growth, Balanced, and Conservative Portfolios, as well as Putnam Income Strategies Fund.

Jeffrey Knight, Robert Kea, and Robert Schoen may also manage other accounts and variable trust funds advised by Putnam Management or an affiliate.

Fund ownership

Your fund’s Portfolio Leader and Portfolio Members, as well as the members of Putnam’s Executive Board, each invest in one or more of the six mutual funds that underlie the Putnam RetirementReady Funds.

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Terms and definitions

Important terms

Total return shows how the value of the fund’s shares changed over time, assuming you held the shares through the entire period and reinvested all distributions in the fund.

Net asset value (NAV) is the price, or value, of one share of a mutual fund, without a sales charge. NAVs fluctuate with market conditions. NAV is calculated by dividing the net assets of each class of shares by the number of outstanding shares in the class.

Public offering price (POP) is the price of a mutual fund share plus the maximum sales charge levied at the time of purchase. POP performance figures shown here assume the 5.25% maximum sales charge for class A shares and 3.25% for class M shares.

Contingent deferred sales charge (CDSC) is a charge applied at the time of the redemption of class B or C shares and assumes redemption at the end of the period. Your fund’s class B CDSC declines from a 5% maximum during the first year to 1% during the sixth year. After the sixth year, the CDSC no longer applies. The CDSC for class C shares is 1% for one year after purchase.

Share classes

Class A shares are generally subject to an initial sales charge and no sales charge on redemption (except on certain redemptions of shares bought without an initial sales charge).

Class B shares may be subject to a sales charge upon redemption.

Class C shares are not subject to an initial sales charge and are subject to a contingent deferred sales charge only if the shares are redeemed during the first year.

Class M shares have a lower initial sales charge and a higher 12b-1 fee than class A shares and no sales charge on redemption (except on certain redemptions of shares bought without an initial sales charge).

Class R shares are not subject to an initial sales charge or CDSC and are available only to certain defined contribution plans.

Class Y shares are not subject to an initial sales charge or CDSC, and carry no 12b-1 fee. They are only available to eligible purchasers, including eligible defined contribution plans or corporate IRAs.

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Comparative indexes

JP Morgan Developed High Yield Index is an unmanaged index of high-yield fixed-income securities issued in developed countries.

Lehman Aggregate Bond Index is an unmanaged index of U.S. investment-grade fixed-income securities.

Lehman Credit Index is an unmanaged index of investment-grade corporate bonds.

Morgan Stanley Capital International (MSCI) EAFE Index is an unmanaged index of equity securities from developed countries in Western Europe, the Far East, and Australasia.

Russell 1000 Index is an unmanaged index of the 1,000 largest companies in the Russell 3000 Index.

Russell 2000 Index is an unmanaged index of the 2,000 smallest companies in the Russell 3000 Index.

S&P 500 Index is an unmanaged index of common stock performance.

Indexes assume reinvestment of all distributions and do not account for fees. Securities and performance of a fund and an index will differ. You cannot invest directly in an index.

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Trustee approval of
management contract

General conclusions

The Board of Trustees of the Putnam funds oversees the management of each fund and, as required by law, determines annually whether to approve the continuance of your fund’s management contract with Putnam Management. In this regard, the Board of Trustees, with the assistance of its Contract Committee consisting solely of Trustees who are not “interested persons” (as such term is defined in the Investment Company Act of 1940, as amended) of the Putnam funds (the “Independent Trustees”), requests and evaluates all information it deems reasonably necessary under the circumstances. Over the course of several months beginning in March and ending in June 2005, the Contract Committee met five times to consider the information provided by Putnam Management and other information developed with the assistance of the Board’s independent counsel and independent staff. The Contract Committee reviewed and discussed key aspects of this information with all of the Independent Trustees. Upon completion of this review, the Contract Committee recommended and the Independent Trustees approved the continuance of your fund’s management contract, effective July 1, 2005.

This approval was based on the following conclusions:

* That the fee schedule currently in effect for your fund represents reasonable compensation in light of the nature and quality of the services being provided to the fund, the fees paid by competitive funds and the costs incurred by Putnam Management in providing such services, and


* That such fee schedule represents an appropriate sharing between fund shareholders and Putnam Management of such economies of scale as may exist in the management of the fund at current asset levels.

These conclusions were based on a comprehensive consideration of all information provided to the Trustees and were not the result of any single factor. Some of the factors that figured particularly in the Trustees’ deliberations and how the Trustees considered these factors are described below, although individual Trustees may have evaluated the information presented differently, giving different weights to various factors. It is also important to recognize that the fee arrangements for your fund and the other Putnam funds are the result of many years of review and discussion between the Independent Trustees and Putnam Management, that certain aspects of such arrangements may receive greater scrutiny in some years than others, and that the Trustees’ conclusions may be based, in part, on their consideration of these same arrangements in prior years.

Model fee schedules and categories; total expenses

The Trustees’ review of the management fees and total expenses of the Putnam funds focused on three major themes:

* Consistency. The Trustees, working in cooperation with Putnam Management, have developed and implemented a series of model fee schedules for the Putnam funds designed

26

to ensure that each fund’s management fee is consistent with the fees for similar funds in the Putnam family of funds and compares favorably with fees paid by competitive funds sponsored by other investment advisors. Under this approach, each Putnam fund is assigned to one of several fee categories based on a combination of factors, including competitive fees and perceived difficulty of management, and a common fee schedule is implemented for all funds in a given fee category. The Trustees reviewed the model fee schedules then in effect for the Putnam funds, including fee levels and breakpoints, and the assignment of your fund to a particular fee category under this structure. (“Breakpoints” are reductions in fee rates that apply to additional assets once specified asset levels are reached.) The Trustees concluded that no changes should be made in the fund’s current fee schedule at this time.


* Competitiveness. The Trustees also reviewed comparative fee and expense information for competitive funds, which indicated that, in a custom peer group of competitive funds selected by Lipper Inc., each Putnam RetirementReady Fund ranked in the first percentile in management fees and in the first percentile in total expenses (less any applicable 12b-1 fees) as of December 31, 2004 (the first percentile being the least expensive funds and the 100th percentile being the most expensive funds). (The comparative fee and expense information for each Putnam RetirementReady Fund excludes the fees and expenses of the underlying Putnam funds in which a Putnam RetirementReady Fund invests.) As a general matter, the Trustees noted that expense ratios for a number of Putnam funds, which show the percentage of fund assets used to pay for management and administrative services, distribution (12b-1) fees and other expenses, had been increasing recently as a result of declining net assets and the natural operation of fee breakpoints. They noted that such expense ratio increases were currently being controlled by expense limitations implemented in January 2004 and which Putnam Management, in consultation with the Contract Committee, has committed to maintain at least through 2006. The Trustees expressed their intention to monitor this information closely to ensure that fees and expenses of the Putnam funds continue to meet evolving competitive standards.

* Economies of scale. The Trustees concluded that the management fee currently in effect for your fund represents an appropriate sharing of economies of scale at current asset levels. The Trustees examined the existing breakpoint structure of the Putnam funds’ management fees in light of competitive industry practices. The Trustees considered various possible modifications to the Putnam funds’ current breakpoint structure, but ultimately concluded that the current breakpoint structure continues to serve the interests of fund shareholders. Accordingly, the Trustees continue to believe that the fee schedules currently in effect for the funds represent an appropriate sharing of economies of scale at current asset levels. The Trustees noted that significant redemptions in many Putnam funds, together with significant changes in the cost structure of Putnam Management, have altered the economics of Putnam Management’s business in significant ways. In view of these changes, the Trustees intend to consider whether a greater sharing of the economies of scale by fund shareholders would be appropriate if and when aggregate assets in the Putnam funds begin to experience meaningful growth.

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In connection with their review of the management fees and total expenses of the Putnam funds, the Trustees also reviewed the costs of the services to be provided and profits to be realized by Putnam Management and its affiliates from the relationship with the funds. This information included trends in revenues, expenses and profitability of Putnam Management and its affiliates relating to the investment management and distribution services provided to the funds. In this regard, the Trustees also reviewed an analysis of Putnam Management’s revenues, expenses and profitability with respect to the funds’ management contracts, allocated on a fund-by-fund basis.

Investment performance

The quality of the investment process provided by Putnam Management represented a major factor in the Trustees’ evaluation of the quality of services provided by Putnam Management under your fund’s management contract. The Trustees were assisted in their review of the funds’ investment process and performance by the work of the Investment Oversight Committees of the Trustees, which meet on a regular monthly basis with the funds’ portfolio teams throughout the year. The Trustees concluded that Putnam Management generally provides a high-quality investment process — as measured by the experience and skills of the individuals assigned to the management of fund portfolios, the resources made available to such personnel, and in general the ability of Putnam Management to attract and retain high-quality personnel — but also recognize that this does not guarantee favorable investment results for every fund in every time period. The Trustees considered the investment performance of each fund over multiple time periods and considered information comparing the fund’s performance with various benchmarks and with the performance of competitive funds. The Trustees noted the satisfactory investment performance of many Putnam funds. They also noted the disappointing investment performance of certain funds in recent years and continued to discuss with senior management of Putnam Management the factors contributing to such underperformance and actions being taken to improve performance. The Trustees recognized that, in recent years, Putnam Management has made significant changes in its investment personnel and processes and in the fund product line to address areas of underperformance. The Trustees indicated their intention to continue to monitor performance trends to assess the effectiveness of these changes and to evaluate whether additional remedial changes are warranted.

As a general matter, the Trustees believe that cooperative efforts between the Trustees and Putnam Management represent the most effective way to address investment performance problems. The Trustees believe that investors in the Putnam funds have, in effect, placed their trust in the Putnam organization, under the oversight of the funds’ Trustees, to make appropriate decisions regarding the management of the funds. Based on the responsiveness of Putnam Management in the recent past to Trustee concerns about investment performance, the Trustees believe that it is preferable to seek change within Putnam Management to address performance shortcomings. In the Trustees’ view, the alternative of terminating a management contract and engaging a new investment advisor for an underperforming fund would entail significant disruptions and would not provide any greater assurance of improved investment performance.

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Brokerage and soft-dollar allocations; other benefits

The Trustees considered various potential benefits that Putnam Management may receive in connection with the services it provides under the management contract with your fund. These include principally benefits related to brokerage and soft-dollar allocations, whereby a portion of the commissions paid by a fund for brokerage is earmarked to pay for research services that may be utilized by a fund’s investment advisor, subject to the obligation to seek best execution. The Trustees believe that soft-dollar credits and other potential benefits associated with the allocation of fund brokerage, which pertains mainly to funds investing in equity securities, represent assets of the funds that should be used for the benefit of fund shareholders. This area has been marked by significant change in recent years. In July 2003, acting upon the Contract Committee’s recommendation, the Trustees directed that allocations of brokerage to reward firms that sell fund shares be discontinued no later than December 31, 2003. In addition, commencing in 2004, the allocation of brokerage commissions by Putnam Management to acquire research services from third-party service providers has been significantly reduced, and continues at a modest level only to acquire research that is customarily not available for cash. The Trustees will continue to monitor the allocation of the funds’ brokerage to ensure that the principle of “best price and execution” remains paramount in the portfolio trading process.

The Trustees’ annual review of your fund’s management contract also included the review of its distributor’s contract and distribution plan with Putnam Retail Management Limited Partnership and the custodian agreement and investor servicing agreement with Putnam Fiduciary Trust Company, all of which provide benefits to affiliates of Putnam Management.

Comparison of retail and institutional fee schedules

The information examined by the Trustees as part of their annual contract review has included for many years information regarding fees charged by Putnam Management and its affiliates to institutional clients such as defined benefit pension plans, college endowments, etc. This information included comparison of such fees with fees charged to the funds, as well as a detailed assessment of the differences in the services provided to these two types of clients. The Trustees observed, in this regard, that the differences in fee rates between institutional clients and the mutual funds are by no means uniform when examined by individual asset sectors, suggesting that differences in the pricing of investment management services to these types of clients reflect to a substantial degree historical competitive forces operating in separate market places. The Trustees considered the fact that fee rates across all asset sectors are higher on average for mutual funds than for institutional clients, as well as the differences between the services that Putnam Management provides to the Putnam funds and those that it provides to institutional clients of the firm, but have not relied on such comparisons to any significant extent in concluding that the management fees paid by your fund are reasonable.

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Other information
for shareholders

Important notice regarding delivery of shareholder documents

In accordance with SEC regulations, Putnam sends a single copy of annual and semiannual shareholder reports, prospectuses, and proxy statements to Putnam shareholders who share the same address. If you prefer to receive your own copy of these documents, please call Putnam at 1-800-225-1581, and Putnam will begin sending individual copies within 30 days.

Proxy voting

Putnam is committed to managing our mutual funds in the best interests of our shareholders. The Putnam funds’ proxy voting guidelines and procedures, as well as information regarding how your fund voted proxies relating to portfolio securities during the 12-month period ended June 30, 2005, are available on the Putnam Individual Investor Web site, www.putnam.com/individual, and on the SEC’s Web site, www.sec.gov. If you have questions about finding forms on the SEC’s Web site, you may call the SEC at 1-800-SEC-0330. You may also obtain the Putnam funds’ proxy voting guidelines and procedures at no charge by calling Putnam’s Shareholder Services at 1-800-225-1581.

Fund portfolio holdings

The funds will file a complete schedule of their portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Shareholders may obtain the funds’ Forms N-Q on the SEC’s Web site at www.sec.gov. In addition, the funds’ Forms N-Q may be reviewed and copied at the SEC’s public reference room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC’s Web site or the operation of the public reference room.

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Financial statements

A guide to financial statements

These sections of the report, as well as the accompanying Notes, constitute the fund’s financial statements.

The fund’s portfolio lists all the fund’s investments and their values as of the last day of the reporting period. Holdings are organized by asset type and industry sector, country, or state to show areas of concentration and diversification.

Statement of assets and liabilities shows how the fund’s net assets and share price are determined. All investment and noninvestment assets are added together. Any unpaid expenses and other liabilities are subtracted from this total. The result is divided by the number of shares to determine the net asset value per share, which is calculated separately for each class of shares. (For funds with preferred shares, the amount subtracted from total assets includes the liquidation preference of preferred shares.)

Statement of operations shows the fund’s net investment gain or loss. This is done by first adding up all the fund’s earnings — from dividends and interest income — and subtracting its operating expenses to determine net investment income (or loss). Then, any net gain or loss the fund realized on the sales of its holdings — as well as any unrealized gains or losses over the period — is added to or subtracted from the net investment result to determine the fund’s net gain or loss for the fiscal period.

Statement of changes in net assets shows how the fund’s net assets were affected by the fund’s net investment gain or loss, by distributions to shareholders, and by changes in the number of the fund’s shares. It lists distributions and their sources (net investment income or realized capital gains) over the current reporting period and the most recent fiscal year-end. The distributions listed here may not match the sources listed in the Statement of operations because the distributions are determined on a tax basis and may be paid in a different period from the one in which they were earned. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year.

Financial highlights provide an overview of the fund’s investment results, per-share distributions, expense ratios, net investment income ratios, and portfolio turnover in one summary table, reflecting the five most recent reporting periods. In a semiannual report, the highlight table also includes the current reporting period. For open-end funds, a separate table is provided for each share class.

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The funds’ portfolios 1/31/06 (Unaudited)       
 
2050 Fund       
EQUITY FUNDS* 90.9%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  19,586  $  241,289 
Putnam Fund for Growth and Income(Class Y)  18,679    376,009 
Putnam International Equity Fund (Class Y)  17,415    487,097 
Putnam Voyager Fund (Class Y)  20,712    376,754 
Total Equity Funds (cost $1,435,258)    $  1,481,149 
 
FIXED INCOME FUNDS* 7.2%  Shares    Value 
Putnam Income Fund (Class Y)  8,528  $  57,908 
Putnam Money Market Fund (Class A)  59,169    59,169 
Total Fixed Income Funds (cost $117,367)    $  117,077 
TOTAL INVESTMENTS       
Total Investments (cost $1,552,625)    $  1,598,226 
* Percentages indicated are based on net assets of $1,629,374.       
 
2045 Fund       
EQUITY FUNDS* 95.2%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  256,145  $  3,155,698 
Putnam Fund for Growth and Income(Class Y)  248,085    4,993,951 
Putnam International Equity Fund (Class Y)  223,536    6,252,314 
Putnam Voyager Fund (Class Y)  273,136    4,968,346 
Total Equity Funds (cost $18,279,684)    $  19,370,309
 
FIXED INCOME FUNDS* 4.8%  Shares    Value 
Putnam Income Fund (Class Y)  115,899  $  786,955 
Putnam Money Market Fund (Class A)  191,076    191,076 
Total Fixed Income Funds (cost $984,930)    $  978,031 
TOTAL INVESTMENTS       
Total Investments (cost $19,264,614)    $ 20,348,340 
* Percentages indicated are based on net assets of $20,341,148.       

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The funds’ portfolios 1/31/06 (Unaudited) (Continued)     
 
2040 Fund       
EQUITY FUNDS* 91.3%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  317,878  $  3,916,251 
Putnam Fund for Growth and Income (Class Y)  316,893    6,379,064 
Putnam International Equity Fund (Class Y)  287,370    8,037,749 
Putnam Voyager Fund (Class Y)  349,021    6,348,698 
Total Equity Funds (cost $23,239,049)    $ 24,681,762 
 
FIXED INCOME FUNDS* 8.7%  Shares    Value 
Putnam Income Fund (Class Y)  231,124  $  1,569,329 
Putnam Money Market Fund (Class A)  778,146    778,146 
Total Fixed Income Funds (cost $2,358,415)    $  2,347,475 
TOTAL INVESTMENTS       
Total Investments (cost $25,597,464)    $  27,029,237
* Percentages indicated are based on net assets of $27,019,635.       
 
2035 Fund       
EQUITY FUNDS* 86.4%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  556,729  $  6,858,907 
Putnam Fund for Growth and Income(Class Y)  597,429    12,026,252 
Putnam International Equity Fund (Class Y)  486,033    13,594,352 
Putnam Voyager Fund (Class Y)  630,481    11,468,450 
Total Equity Funds (cost $41,332,767)    $ 43,947,961 
 
FIXED INCOME FUNDS* 13.6%  Shares    Value 
Putnam Income Fund (Class Y)  726,321  $  4,931,715 
Putnam Money Market Fund (Class A)  1,965,929    1,965,928 
Total Fixed Income Funds (cost $6,934,230)    $  6,897,643 
TOTAL INVESTMENTS       
Total Investments (cost $48,266,997)    $ 50,845,604 
* Percentages indicated are based on net assets of $50,828,409.       

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The funds’ portfolios 1/31/06 (Unaudited) (Continued)     
 
2030 Fund       
EQUITY FUNDS* 81.6%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  777,999  $  9,584,951 
Putnam Fund for Growth and Income (Class Y)  828,057    16,668,781 
Putnam International Equity Fund (Class Y)  707,553    19,790,252 
Putnam Voyager Fund (Class Y)  911,971    16,588,759 
Total Equity Funds (cost $58,401,962)    $  62,632,743 
 
FIXED INCOME FUNDS* 18.4%  Shares    Value 
Putnam Income Fund (Class Y)  1,535,402  $  10,425,382 
Putnam Money Market Fund (Class A)  3,717,220    3,717,220 
Total Fixed Income Funds (cost $14,236,162)    $  14,142,602 
TOTAL INVESTMENTS       
Total Investments (cost $72,638,124)    $  76,775,345 
* Percentages indicated are based on net assets of $76,748,977.       
 
2025 Fund       
EQUITY FUNDS* 76.7%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  1,057,963  $  13,034,107 
Putnam Fund for Growth and Income(Class Y)  1,172,446    23,601,336 
Putnam International Equity Fund (Class Y)  965,673    27,009,883 
Putnam Voyager Fund (Class Y)  1,291,212    23,487,158 
Total Equity Funds (cost $81,301,727)    $  87,132,484 
 
FIXED INCOME FUNDS * 23.3%  Shares    Value 
Putnam Income Fund (Class Y)  2,602,911  $  17,673,760 
Putnam Money Market Fund (Class A)  8,844,618    8,844,618 
Total Fixed Income Funds (cost $26,691,357)    $  26,518,378 
TOTAL INVESTMENTS       
Total Investments (cost $107,993,084)    $ 113,650,862 
* Percentages indicated are based on net assets of $113,611,936.       

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The funds’ portfolios 1/31/06 (Unaudited) (Continued)     
 
2020 Fund       
EQUITY FUNDS* 66.7%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  1,221,092  $  15,043,849 
Putnam Fund for Growth and Income (Class Y)  1,418,935    28,563,157 
Putnam International Equity Fund (Class Y)  852,307    23,839,039 
Putnam Voyager Fund (Class Y)  1,562,644    28,424,487 
Total Equity Funds (cost $90,328,091)    $  95,870,532 
 
FIXED INCOME FUNDS* 33.3%  Shares    Value 
Putnam Income Fund (Class Y)  4,968,982  $  33,739,391 
Putnam Money Market Fund (Class A)  14,090,060    14,090,060 
Total Fixed Income Funds (cost $48,109,292)    $  47,829,451 
TOTAL INVESTMENTS       
Total Investments (cost $138,437,383)    $ 143,699,983 
* Percentages indicated are based on net assets of $143,654,085.       
 
2015 Fund       
EQUITY FUNDS* 53.8%  Shares    Value 
Putnam Capital Opportunities Fund (Class Y)  1,029,203  $  12,679,781 
Putnam Fund for Growth and Income(Class Y)  1,015,588    20,443,792 
Putnam International Equity Fund (Class Y)  404,314    11,308,668 
Putnam Voyager Fund (Class Y)  1,118,514    20,345,770 
Total Equity Funds (cost $61,195,160)    $  64,778,011 
 
FIXED INCOME FUNDS* 46.2%  Shares    Value 
Putnam Income Fund (Class Y)  5,396,079  $  36,639,374 
Putnam Money Market Fund (Class A)  18,973,936    18,973,936 
Total Fixed Income Funds (cost $55,972,859)    $  55,613,310 
TOTAL INVESTMENTS       
Total Investments (cost $117,168,019)    $ 120,391,321 
* Percentages indicated are based on net assets of $120,350,267.       

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The funds’ portfolios 1/31/06 (Unaudited) (Continued)   
 
2010 Fund     
EQUITY FUNDS* 33.6%  Shares  Value 
Putnam Capital Opportunities Fund (Class Y)  445,222  $ 5,485,134 
Putnam Fund for Growth and Income (Class Y)  516,868  10,404,551 
Putnam International Equity Fund (Class Y)  97,122  2,716,489 
Putnam Voyager Fund (Class Y)  569,272  10,355,072 
Total Equity Funds (cost $27,617,889)    $28,961,246 
 
FIXED INCOME FUNDS* 66.4%  Shares  Value 
Putnam Income Fund (Class Y)  5,147,863  $34,953,995 
Putnam Money Market Fund (Class A)  22,261,219  22,261,219 
Total Fixed Income Funds (cost $57,540,608)    $57,215,214 
TOTAL INVESTMENTS     
Total Investments (cost $85,158,497)    $86,176,460 
* Percentages indicated are based on net assets of $86,148,665.     
 
Maturity Fund     
EQUITY FUNDS* 25.5%  Shares  Value 
Putnam Capital Opportunities Fund (Class Y)  195,596  $ 2,409,742 
Putnam Fund for Growth and Income(Class Y)  227,199  4,573,508 
Putnam International Equity Fund (Class Y)  —  — 
Putnam Voyager Fund (Class Y)  250,258  4,552,192 
Total Equity Funds (cost $11,131,705)    $11,535,442 
 
FIXED INCOME FUNDS* 74.5%  Shares  Value 
Putnam Income Fund (Class Y)  2,977,982  $20,220,494 
Putnam Money Market Fund (Class A)  13,538,355  13,538,356 
Total Fixed Income Funds (cost $33,987,649)    $33,758,850 
TOTAL INVESTMENTS     
Total Investments (cost $45,119,354)    $45,294,292 
* Percentages indicated are based on net assets of $45,278,284.     

The accompanying notes are an integral part of these financial statements.

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Statement of assets and liabilities 1/31/06 (Unaudited)   
 
ASSETS  2050 Fund  2045 Fund 
Investments in affiliated underlying Putnam Funds, at value (Notes 1 and 6)  $1,598,226  $20,348,340 
Interest receivable  179  651 
Receivable for shares of the fund sold  11,025  58,583 
Receivable for securities sold  3,521  166,700 
Unamortized offering costs (Note 1)  18,769  — 
Receivable from Manager (Note 2)  13,395  — 
Total assets  1,645,115  20,574,274 
 
LIABILITIES     
Payable for shares of the fund redeemed  3,521  166,700 
Payable for securities purchased  11,198  59,211 
Payable for compensation of Manager (Note 2)  109  1,824 
Payable for distribution fees (Note 2)  276  2,483 
Other accrued expenses  637  2,908 
Total liabilities  15,741  233,126 
Net assets  $1,629,374  $20,341,148 
 
REPRESENTED BY     
Paid-in-capital (unlimited shares authorized) (Notes 1 and 4)  $1,554,021  $18,698,500 
Undistributed net investment loss (Note 1)  (3,850)  (68,322) 
Accumulated net realized gain on investments (Note 1)  33,602  627,244 
Net unrealized appreciation of investments  45,601  1,083,726 
Total — Representing net assets applicable to capital outstanding  $1,629,374  $20,341,148 
 
(Continued on next page)     

37

Statement of assets and liabilities (Unaudited) (Continued)   
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE  2050 Fund  2045 Fund 
Computation of net asset value and offering price Class A     
Net Assets  $1,240,028  $11,912,053 
Number of shares outstanding  21,755  163,223 
Net asset value  $57.00  $72.98 
Offering price per class A share (front-end sales charge of 5.25%)  $60.16  $77.02 
Computation of net asset value Class B     
Net Assets  $49,991  $31,952 
Number of shares outstanding  878  451 
Net asset value  $56.96  $70.92 
Computation of net asset value Class C     
Net Assets  $1,169  $9,304 
Number of shares outstanding  21  131 
Net asset value  $56.98  $71.21 
Computation of net asset value Class M     
Net Assets  $3,465  $8,051 
Number of shares outstanding  61  113 
Net asset value  $56.99  $71.24 
Offering price per class M share (front-end sales charge of 3.25%)  $58.90  $73.63 
Computation of net asset value Class R     
Net Assets  $1,173  $1,080 
Number of shares outstanding  21  15 
Net asset value  $57.03  $74.46 
Computation of net asset value Class Y     
Net Assets  $333,548  $8,378,708 
Number of shares outstanding  5,845  105,255 
Net asset value  $57.07  $79.60 
Cost of investments (Note 1)  $1,552,625  $19,264,614 

The accompanying notes are an integral part of these financial statements.

38

Statement of assets and liabilities (Unaudited) (Continued)   
 
ASSETS  2040 Fund  2035 Fund 
Investments in affiliated underlying Putnam Funds, at value (Notes 1 and 6)  $27,029,237  $50,845,604 
Interest receivable  2,587  6,568 
Receivable for shares of the fund sold  607,009  313,203 
Receivable for securities sold  326,922  496,279 
Total assets  27,965,755  51,661,654 
 
LIABILITIES     
Payable for shares of the fund redeemed  326,922  496,279 
Payable for securities purchased  609,506  319,538 
Payable for compensation of Manager (Note 2)  2,353  4,300 
Payable for distribution fees (Note 2)  3,418  5,791 
Other accrued expenses  3,921  7,337 
Total liabilities  946,120  833,245 
Net assets  $27,019,635  $50,828,409 
 
REPRESENTED BY     
Paid-in-capital (unlimited shares authorized) (Notes 1 and 4)  $24,796,864  $46,683,911 
Undistributed net investment loss (Note 1)  (73,950)  (132,660) 
Accumulated net realized gain on investments (Note 1)  864,948  1,698,551 
Net unrealized appreciation of investments  1,431,773  2,578,607 
Total — Representing net assets applicable to capital outstanding  $27,019,635  $50,828,409 
 
(Continued on next page)     

39

Statement of assets and liabilities (Unaudited) (Continued)   
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE  2040 Fund  2035 Fund 
Computation of net asset value and offering price Class A     
Net Assets  $16,743,310  $27,364,645 
Number of shares outstanding  230,214  385,817 
Net asset value  $72.73  $70.93 
Offering price per class A share (front-end sales charge of 5.25%)  $76.76  $74.86 
Computation of net asset value Class B     
Net Assets  $49,606  $182,138 
Number of shares outstanding  702  2,659 
Net asset value  $70.68  $68.51 
Computation of net asset value Class C     
Net Assets  $1,206  $1,194 
Number of shares outstanding  17  17 
Net asset value  $70.85  $68.93 
Computation of net asset value Class M     
Net Assets  $12,069  $27,254 
Number of shares outstanding  170  396 
Net asset value  $70.80  $68.84 
Offering price per class M share (front-end sales charge of 3.25%)  $73.18  $71.15 
Computation of net asset value Class R     
Net Assets  $1,078  $1,518 
Number of shares outstanding  15  22 
Net asset value  $74.28  $69.99 
Computation of net asset value Class Y     
Net Assets  $10,212,366  $23,251,660 
Number of shares outstanding  129,196  301,117 
Net asset value  $79.05  $77.22 
Cost of investments (Note 1)  $25,597,464  $48,266,997 

The accompanying notes are an integral part of these financial statements.

40

Statement of assets and liabilities (Unaudited) (Continued)   
 
ASSETS  2030 Fund  2025 Fund 
Investments in affiliated underlying Putnam Funds, at value (Notes 1 and 6)  $76,775,345  $113,650,862 
Interest receivable  12,784  30,452 
Receivable for shares of the fund sold  217,797  247,946 
Receivable for securities sold  925,852  1,361,398 
Total assets  77,931,778  115,290,658 
 
LIABILITIES     
Payable for shares of the fund redeemed  925,852  1,361,398 
Payable for securities purchased  230,138  277,343 
Payable for compensation of Manager (Note 2)  7,924  12,930 
Payable for distribution fees (Note 2)  8,315  12,417 
Other accrued expenses  10,572  14,634 
Total liabilities  1,182,801  1,678,722 
Net assets  $76,748,977  $113,611,936 
 
REPRESENTED BY     
Paid-in-capital (unlimited shares authorized) (Notes 1 and 4)  $70,298,764  $104,142,756 
Undistributed net investment loss (Note 1)  (177,436)  (222,667) 
Accumulated net realized gain on investments (Note 1)  2,490,428  4,034,069 
Net unrealized appreciation of investments  4,137,221  5,657,778 
Total — Representing net assets applicable to capital outstanding  $76,748,977  $113,611,936 
 
(Continued on next page)     

41

Statement of assets and liabilities (Unaudited) (Continued)   
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE  2030 Fund  2025 Fund 
Computation of net asset value and offering price Class A     
Net Assets  $37,368,787  $56,036,312 
Number of shares outstanding  533,948  762,759 
Net asset value  $69.99  $73.47 
Offering price per class A share (front-end sales charge of 5.25%)  $73.87  $77.54 
Computation of net asset value Class B     
Net Assets  $293,530  $413,104 
Number of shares outstanding  4,296  5,819 
Net asset value  $68.32  $70.99 
Computation of net asset value Class C     
Net Assets  $38,811  $102,145 
Number of shares outstanding  569  1,435 
Net asset value  $68.19  $71.16 
Computation of net asset value Class M     
Net Assets  $52,153  $207,339 
Number of shares outstanding  762  2,912 
Net asset value  $68.41  $71.19 
Offering price per class M share (front-end sales charge of 3.25%)  $70.71  $73.58 
Computation of net asset value Class R     
Net Assets  $47,377  $2,618 
Number of shares outstanding  693  37 
Net asset value  $68.34  $71.27 
Computation of net asset value Class Y     
Net Assets  $38,948,319  $56,850,418 
Number of shares outstanding  515,309  771,646 
Net asset value  $75.58  $73.67 
Cost of investments (Note 1)  $72,638,124  $107,993,084 

The accompanying notes are an integral part of these financial statements.

42

Statement of assets and liabilities (Unaudited) (Continued)   
 
ASSETS  2020 Fund  2015 Fund 
Investments in affiliated underlying Putnam Funds, at value (Notes 1 and 6)  $143,699,983  $120,391,321 
Interest receivable  47,324  65,270 
Receivable for shares of the fund sold  1,162,147  232,872 
Receivable for securities sold  938,749  1,619,725 
Total assets  145,848,203  122,309,188 
 
LIABILITIES     
Payable for shares of the fund redeemed  938,748  1,619,725 
Payable for securities purchased  1,207,810  295,876 
Payable for compensation of Manager (Note 2)  13,412  14,628 
Payable for distribution fees (Note 2)  15,643  13,031 
Other accrued expenses  18,505  15,661 
Total liabilities  2,194,118  1,958,921 
Net assets  $143,654,085  $120,350,267 
 
REPRESENTED BY     
Paid-in-capital (unlimited shares authorized) (Notes 1 and 4)  $134,500,650  $113,684,804 
Undistributed net investment loss (Note 1)  (181,740)  (125,772) 
Accumulated net realized gain on investments (Note 1)  4,072,575  3,567,933 
Net unrealized appreciation of investments  5,262,600  3,223,302 
Total — Representing net assets applicable to capital outstanding  $143,654,085  $120,350,267 
 
(Continued on next page)     

43

Statement of assets and liabilities (Unaudited) (Continued)   
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE  2020 Fund  2015 Fund 
Computation of net asset value and offering price Class A     
Net Assets  $72,610,251  $58,891,487 
Number of shares outstanding  1,087,850  889,107 
Net asset value  $66.75  $66.24 
Offering price per class A share (front-end sales charge of 5.25%)  $70.45  $69.91 
Computation of net asset value Class B     
Net Assets  $328,262  $275,735 
Number of shares outstanding  5,008  4,233 
Net asset value  $65.55  $65.14 
Computation of net asset value Class C     
Net Assets  $102,119  $131,304 
Number of shares outstanding  1,555  2,017 
Net asset value  $65.67  $65.11 
Computation of net asset value Class M     
Net Assets  $381,779  $161,135 
Number of shares outstanding  5,811  2,466 
Net asset value  $65.70  $65.34 
Offering price per class M share (front-end sales charge of 3.25%)  $67.91  $67.53 
Computation of net asset value Class R     
Net Assets  $59,605  $30,710 
Number of shares outstanding  907  470 
Net asset value  $65.70  $65.31 
Computation of net asset value Class Y     
Net Assets  $70,172,069  $60,859,896 
Number of shares outstanding  982,168  916,752 
Net asset value  $71.45  $66.39 
Cost of investments (Note 1)  $138,437,383  $117,168,019 

The accompanying notes are an integral part of these financial statements.

44

Statement of assets and liabilities (Unaudited) (Continued)   
 
ASSETS  2010 Fund  Maturity Fund 
Investments in affiliated underlying Putnam Funds, at value (Notes 1 and 6)  $86,176,460  $45,294,292 
Interest receivable  76,313  46,183 
Receivable for shares of the fund sold  60,603  126,946 
Receivable for securities sold  448,458  66,763 
Total assets  86,761,834  45,534,184 
 
LIABILITIES     
Payable for shares of the fund redeemed  448,458  66,763 
Payable for securities purchased  134,276  171,533 
Payable for compensation of Manager (Note 2)  9,134  5,522 
Payable for distribution fees (Note 2)  9,612  6,409 
Other accrued expenses  11,689  5,673 
Total liabilities  613,169  255,900 
Net assets  $86,148,665  $45,278,284 
 
REPRESENTED BY     
Paid-in-capital (unlimited shares authorized) (Notes 1 and 4)  $83,580,411  $44,720,072 
Undistributed net investment income (loss) (Note 1)  16,264  (23,984) 
Accumulated net realized gain on investments (Note 1)  1,534,027  407,258 
Net unrealized appreciation of investments  1,017,963  174,938 
Total — Representing net assets applicable to capital outstanding  $86,148,665  $45,278,284 
 
(Continued on next page)     

45

Statement of assets and liabilities (Unaudited) (Continued)   
 
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE  2010 Fund  Maturity Fund 
Computation of net asset value and offering price Class A     
Net Assets  $44,095,793  $30,107,090 
Number of shares outstanding  748,746  528,663 
Net asset value  $58.89  $56.95 
Offering price per class A share (front-end sales charge of 5.25%)  $62.15  $60.11 
Computation of net asset value Class B     
Net Assets  $79,515  $126,639 
Number of shares outstanding  1,371  2,222 
Net asset value  $57.98  $56.99 
Computation of net asset value Class C     
Net Assets  $33,711  $1,053 
Number of shares outstanding  584  18 
Net asset value  $57.71  $57.01 
Computation of net asset value Class M     
Net Assets  $118,661  $2,144 
Number of shares outstanding  2,053  38 
Net asset value  $57.80  $56.97 
Offering price per class M share (front-end sales charge of 3.25%)  $59.74  $58.88 
Computation of net asset value Class R     
Net Assets  $93,980  $1,060 
Number of shares outstanding  1,625  19 
Net asset value  $57.83  $57.00 
Computation of net asset value Class Y     
Net Assets  $41,727,005  $15,040,298 
Number of shares outstanding  678,056  263,474 
Net asset value  $61.54  $57.08 
Cost of investments (Note 1)  $85,158,497  $45,119,354 

The accompanying notes are an integral part of these financial statements.

46

Statement of operations       
For the period ended 1/31/06 (Unaudited)       
 
INVESTMENT INCOME  2050 Fund    2045 Fund 
Income distributions from underlying Putnam Funds  $  14,335  $ 232,433 
 
EXPENSES (NOTE 2)       
Compensation of Manager    235  4,316 
Distribution fees — Class A    843  11,950 
Distribution fees — Class B    181  81 
Distribution fees — Class C    19  48 
Distribution fees — Class M    13  32 
Distribution fees — Class R    3  10 
Reports to shareholder    732  1,206 
Audit fees    99  1,815 
Registration fees    121  393 
Other fees    35  59 
Amortization of offering costs (Note 1)    38,804  21,928 
Fees waived and reimbursed by Manager (Note 2)    (39,555)  (21,086) 
Total expenses    1,530  20,752 
Net investment income    12,805  211,681 
Net realized gain on sale of underlying Putnam fund shares    23,030  407,339 
Capital gain distributions from underlying Putnam fund shares    27,154  457,020 
Net unrealized appreciation of underlying Putnam fund shares       
during the period    34,373  378,648 
Net gain on investments    84,557  1,243,007 
Net increase in net assets resulting from operations  $  97,362  $1,454,688 

The accompanying notes are an integral part of these financial statements.

47

Statement of operations (Continued)     
For the period ended 1/31/06 (Unaudited)     
 
INVESTMENT INCOME  2040 Fund  2035 Fund 
Income distributions from underlying Putnam Funds  $ 310,494  $ 601,786 
 
EXPENSES (NOTE 2)     
Compensation of Manager  5,749  11,112 
Distribution fees — Class A  17,515  29,404 
Distribution fees — Class B  209  644 
Distribution fees — Class C  5  5 
Distribution fees — Class M  44  85 
Distribution fees — Class R  10  18 
Audit fees  2,417  4,672 
Registration fees  545  825 
Reports to shareholder  1,632  3,125 
Other fees  83  154 
Amortization of offering costs (Note 1)  21,928  21,928 
Fees waived and reimbursed by Manager (Note 2)  (20,857)  (19,592) 
Total expenses  29,280  52,380 
Net investment income  281,214  549,406 
Net realized gain on sale of underlying Putnam fund shares  637,086  1,383,664 
Capital gain distributions from underlying Putnam fund shares  613,934  1,092,449 
Net unrealized appreciation of underlying Putnam fund shares     
during the period  350,086  350,086 
Net gain on investments  1,601,106  2,826,199 
Net increase in net assets resulting from operations  $1,882,320  $3,375,605 

The accompanying notes are an integral part of these financial statements.

48

Statement of operations (Continued)     
For the period ended 1/31/06 (Unaudited)     
 
INVESTMENT INCOME  2030 Fund  2025 Fund 
Income distributions from underlying Putnam Funds  $ 995,433  $1,520,529 
 
EXPENSES (NOTE 2)     
Compensation of Manager  18,017  27,222 
Distribution fees — Class A  44,191  65,859 
Distribution fees — Class B  1,298  1,437 
Distribution fees — Class C  174  280 
Distribution fees — Class M  180  728 
Distribution fees — Class R  74  5 
Audit fees  7,574  11,445 
Registration fees  516  222 
Reports to shareholder  4,273  — 
Other fees  221  5,365 
Amortization of offering costs (Note 1)  21,928  21,928 
Fees waived and reimbursed by Manager (Note 2)  (16,496)  (11,737) 
Total expenses  81,950  122,754 
Net investment income  913,483  1,397,775 
Net realized gain on sale of underlying Putnam fund shares  1,985,516  3,803,474 
Capital gain distributions from underlying Putnam fund shares  1,658,093  2,294,479 
Net unrealized appreciation (depreciation) of underlying     
Putnam fund shares during the period  625,121  (215,516) 
Net gain on investments  4,268,730  5,882,437 
Net increase in net assets resulting from operations  $5,182,213  $7,280,212 

The accompanying notes are an integral part of these financial statements.

49

Statement of operations (Continued)       
For the period ended 1/31/06 (Unaudited)       
 
INVESTMENT INCOME  2020 Fund    2015 Fund 
Income distributions from underlying Putnam Funds  $1,765,534  $  1,805,406 
 
EXPENSES (NOTE 2)       
Compensation of Manager  31,064    31,255 
Distribution fees — Class A  74,121    72,289 
Distribution fees — Class B  1,412    901 
Distribution fees — Class C  351    565 
Distribution fees — Class M  1,245    562 
Distribution fees — Class R  54    41 
Audit fees  13,060    13,140 
Registration fees  2,313    — 
Other fees  5,656    4,572 
Amortization of offering costs (Note 1)  21,928    21,928 
Fees waived and reimbursed by Manager (Note 2)  (11,893)    (8,385) 
Total expenses  139,311    136,868 
Net investment income  1,626,223    1,668,538 
Net realized gain on sale of underlying Putnam fund shares  3,265,858    4,349,752 
Capital gain distributions from underlying Putnam fund shares  2,426,270    2,061,980 
Net unrealized depreciation of underlying Putnam fund shares       
during the period  (277,981)    (2,738,090) 
Net gain on investments  5,414,147    3,673,642 
Net increase in net assets resulting from operations  $7,040,370  $  5,342,180 

The accompanying notes are an integral part of these financial statements.

50

Statement of operations (Continued)         
For the period ended 1/31/06 (Unaudited)         
 
INVESTMENT INCOME    2010 Fund  Maturity Fund 
Income distributions from underlying Putnam funds  $  1,304,840  $  754,718 
 
EXPENSES (NOTE 2)         
Compensation of Manager    20,492    11,450 
Distribution fees — Class A    50,748    35,578 
Distribution fees — Class B    441    630 
Distribution fees — Class C    150    5 
Distribution fees — Class M    377    11 
Distribution fees — Class R    128    3 
Audit fees    8,615    4,813 
Registration fees    446    — 
Reports to shareholder    4,766    1,521 
Other fees    242    84 
Amortization of offering costs (Note 1)    21,928    32,863 
Fees waived and reimbursed by Manager (Note 2)    (15,507)    (27,832) 
Total expenses    92,826    59,126 
Net investment income    1,212,014    695,592 
Net realized gain on sale of underlying Putnam fund shares    1,240,912    334,176 
Capital gain distributions from underlying Putnam fund shares    1,007,022    404,373 
Net unrealized depreciation of underlying Putnam fund shares         
during the period    (1,125,070)    (531,180) 
Net gain on investments    1,122,864    207,369 
Net increase in net assets resulting from operations  $  2,334,878  $  902,961 

The accompanying notes are an integral part of these financial statements.

51

Statement of changes in net assets       
 
2050 Fund       
INCREASE IN NET ASSETS       
  For the period ended 
  1/31/06    7/31/05* 
Operations:       
Net investment income (loss)  $ 12,805  $  (50) 
Net realized gain on underlying Putnam fund shares  50,184    2,909 
Net unrealized appreciation on underlying Putnam fund shares  34,373    11,228 
Net increase in net assets resulting from operations  97,362    14,087 
Distributions to shareholders (Note 1)       
From net investment income       
Class A  (12,282)    — 
Class B  (331)    — 
Class C  (40)    — 
Class M  (35)    — 
Class R  (13)    — 
Class Y  (4,084)    — 
From net realized short-term gain on investments       
Class A  (14,240)    — 
Class B  (588)    — 
Class C  (73)    — 
Class M  (55)    — 
Class R  (19)    — 
Class Y  (4,516)    — 
Increase from capital share transactions (Note 4)  1,121,210    432,991 
Total increase in net assets  1,182,296    447,078 
 
NET ASSETS       
Beginning of period  447,078    — 
End of period  $1,629,374  $  447,078 
Undistributed net investment income (loss), end of period  $ (3,850)  $   130
* Commencement of operations May 2, 2005.       

The accompanying notes are an integral part of these financial statements.

52

Statement of changes in net assets (Continued)   
 
2045 Fund     
INCREASE IN NET ASSETS     
  For the period ended 
  1/31/06  7/31/05 
Operations:     
Net investment income  $ 211,681  $ 63,447 
Net realized gain on underlying Putnam fund shares  864,359  352,834 
Net unrealized appreciation on underlying Putnam fund shares  378,648  705,078 
Net increase in net assets resulting from operations  1,454,688  1,121,359 
Distributions to shareholders (Note 1)     
From net investment income     
Class A  (166,913)  (26,219) 
Class B  (218)  (8) 
Class C  (79)  (8) 
Class M  (87)  (9) 
Class R  —  (9) 
Class Y  (126,139)  (33,627) 
From net realized short-term gain on investments     
Class A  (349,962)  — 
Class B  (603)  — 
Class C  (313)  — 
Class M  (271)  — 
Class R  —  — 
Class Y  (238,800)  — 
Increase from capital share transactions (Note 4)  3,670,902  15,037,464 
Total increase in net assets  4,242,205  16,098,943 
 
NET ASSETS     
Beginning of period  16,098,943  — 
End of period  $20,341,148  $16,098,943 
Undistributed net investment income (loss), end of period  $ (68,322)  $ 13,433 

The accompanying notes are an integral part of these financial statements.

53

Statement of changes in net assets (Continued)   
 
2040 Fund     
INCREASE IN NET ASSETS     
  For the period ended 
  1/31/06  7/31/05 
Operations:     
Net investment income  $ 281,214  $ 97,884 
Net realized gain on underlying Putnam fund shares  1,251,020  450,225 
Net unrealized appreciation on underlying Putnam fund shares  350,086  1,081,687 
Net increase in net assets resulting from operations  1,882,320  1,629,796 
Distributions to shareholders (Note 1)     
From net investment income     
Class A  (234,538)  (40,513) 
Class B  (483)  (7) 
Class C  (10)  (7) 
Class M  (131)  (48) 
Class R  —  (8) 
Class Y  (146,480)  (44,746) 
From net realized short-term gain on investments     
Class A  (534,325)  — 
Class B  (1,625)  — 
Class C  (43)  — 
Class M  (423)  — 
Class R  —  — 
Class Y  (299,881)  — 
Redemption fees (Note 1)  —  1,976 
Increase from capital share transactions (Note 4)  5,092,087  19,716,724 
Total increase in net assets  5,756,468  21,263,167 
 
NET ASSETS     
Beginning of period  21,263,167  — 
End of period  $27,019,635  $21,263,167 
Undistributed net investment income (loss), end of period  $ (73,950)  $ 26,478 

The accompanying notes are an integral part of these financial statements.

54

Statement of changes in net assets (Continued)   
 
2035 Fund     
INCREASE IN NET ASSETS     
               For the period ended 
  1/31/06  7/31/05 
 
Operations:     
Net investment income  $ 549,406  $ 238,444 
Net realized gain on underlying Putnam fund shares  2,476,113  791,457 
Net unrealized appreciation on underlying Putnam fund shares  350,086  2,228,521 
Net increase in net assets resulting from operations  3,375,605  3,258,422 
Distributions to shareholders (Note 1)     
From net investment income     
Class A  (415,033)  (70,869) 
Class B  (2,451)  (86) 
Class C  (12)  (7) 
Class M  (327)  (21) 
Class R  —  (7) 
Class Y  (359,130)  (98,944) 
From net realized short-term gain on investments     
Class A  (872,564)  — 
Class B  (5,959)  — 
Class C  (43)  — 
Class M  (885)  — 
Class R  (6)  — 
Class Y  (679,478)  — 
From net realized long-term gain on investments     
Class A  (5,644)  — 
Class B  (39)  — 
Class C  —  — 
Class M  (6)  — 
Class R  —  — 
Class Y  (4,395)  — 
Increase from capital share transactions (Note 4)  7,705,789  39,004,499 
Total increase in net assets  8,735,422  42,092,987 
 
NET ASSETS     
Beginning of period  42,092,987  — 
End of period  $50,828,409  $42,092,987 
Undistributed net investment income (loss), end of period  $ (132,623)  $ 94,887 
The accompanying notes are an integral part of these financial statements.     

55

Statement of changes in net assets (Continued)   
 
2030 Fund     
INCREASE IN NET ASSETS     
                  For the period ended 
  1/31/06  7/31/05 
Operations:     
Net investment income  $ 913,483  $ 412,763 
Net realized gain on underlying Putnam fund shares  3,643,609  1,147,493 
Net unrealized appreciation on underlying Putnam fund shares  625,121  3,512,100 
Net increase in net assets resulting from operations  5,182,213  5,072,356 
Distributions to shareholders (Note 1)     
From net investment income     
Class A  (645,707)  (98,122) 
Class B  (4,028)  (6) 
Class C  (639)  (6) 
Class M  (779)  (19) 
Class R  (843)  (6) 
Class Y  (651,676)  (140,095) 
From net realized short-term gain on investments     
Class A  (1,184,385)  — 
Class B  (9,681)  — 
Class C  (1,367)  — 
Class M  (1,738)  — 
Class R  (1,483)  — 
Class Y  (1,079,683)  — 
From net realized long-term gain on investments     
Class A  (11,612)  — 
Class B  (95)  — 
Class C  (13)  — 
Class M  (17)  — 
Class R  (15)  — 
Class Y  (10,585)  — 
Redemption fees (Note 1)  958  — 
Increase from capital share transactions (Note 4)  4,818,550  65,517,500 
Total increase in net assets  6,397,375  70,351,602 
 
NET ASSETS     
Beginning of period  70,351,602  — 
End of period  $76,748,977  $70,351,602 
Undistributed net investment income (loss), end of period  $ (177,436)  $ 212,753 
The accompanying notes are an integral part of these financial statements.     

56

Statement of changes in net assets (Continued)     
 
2025 Fund       
INCREASE IN NET ASSETS       
               For the period ended 
  1/31/06    7/31/05 
Operations:       
Net investment income  $ 1,397,775  $  762,161 
Net realized gain on underlying Putnam fund shares  6,097,953    1,265,064 
Net unrealized appreciation (depreciation) on underlying Putnam fund shares  (215,516)    5,873,294 
Net increase in net assets resulting from operations  7,280,212    7,900,519 
Distributions to shareholders (Note 1)       
From net investment income       
Class A  (980,941)    (156,581) 
Class B  (4,934)    (79) 
Class C  (706)    (5) 
Class M  (3,000)    (210) 
Class R  (38)    (6) 
Class Y  (1,051,074)    (242,685) 
From net realized short-term gain on investments       
Class A  (1,681,715)    — 
Class B  (10,598)    — 
Class C  (1,681)    — 
Class M  (6,352)    — 
Class R  (69)    — 
Class Y  (1,624,261)    — 
From net realized long-term gain on investments       
Class A  (2,161)    — 
Class B  (14)    — 
Class C  (2)    — 
Class M  (8)    — 
Class R  —    — 
Class Y  (2,087)    — 
Redemption fees (Note 1)  715    860 
Increase from capital share transactions (Note 4)  2,073,018    102,125,819 
Total increase in net assets  3,984,304    109,627,632 
 
NET ASSETS       
Beginning of period  109,627,632    — 
End of period  $113,611,936  $109,627,632 
Undistributed net investment income (loss), end of period  $ (222,667)  $  420,251 
The accompanying notes are an integral part of these financial statements.       

57

Statement of changes in net assets (Continued)     
 
2020 Fund       
INCREASE IN NET ASSETS       
                For the period ended 
  1/31/06    7/31/05 
Operations:       
Net investment income  $ 1,626,223  $  944,731 
Net realized gain on underlying Putnam fund shares  5,692,128    1,390,724 
Net unrealized appreciation (depreciation) on underlying Putnam fund shares  (277,981)    5,540,581 
Net increase in net assets resulting from operations  7,040,370    7,876,036 
Distributions to shareholders (Note 1)       
From net investment income       
Class A  (1,160,808)    (155,610) 
Class B  (5,415)    (90) 
Class C  (1,080)    (14) 
Class M  (6,461)    (151) 
Class R  (1,088)    (5) 
Class Y  (1,251,933)    (232,313) 
From net realized short-term gain on investments       
Class A  (1,506,503)    — 
Class B  (8,537)    — 
Class C  (1,873)    — 
Class M  (9,715)    — 
Class R  (1,313)    — 
Class Y  (1,475,339)    — 
From net realized long-term gain on investments       
Class A  (3,510)    — 
Class B  (20)    — 
Class C  (4)    — 
Class M  (23)    — 
Class R  (3)    — 
Class Y  (3,437)    — 
Increase from capital share transactions (Note 4)  21,610,995    112,951,929 
Total increase in net assets  23,214,303    120,439,782
 
NET ASSETS       
Beginning of period  120,439,782    — 
End of period  $143,654,085  $ 120,439,782 
Undistributed net investment income (loss), end of period  $ (181,740)  $  618,822 
The accompanying notes are an integral part of these financial statements.       

58

Statement of changes in net assets (Continued)   
 
2015 Fund     
INCREASE (DECREASE) IN NET ASSETS     
            For the period ended 
  1/31/06  7/31/05 
Operations:     
Net investment income  $ 1,668,538  $ 1,350,566 
Net realized gain on underlying Putnam fund shares  6,411,732  1,191,425 
Net unrealized appreciation (depreciation) on underlying Putnam fund shares  (2,738,090)  5,961,392 
Net increase in net assets resulting from operations  5,342,180  8,503,383 
Distributions to shareholders (Note 1)     
From net investment income     
Class A  (1,340,948)  (151,730) 
Class B  (3,935)  (23) 
Class C  (2,633)  (46) 
Class M  (3,385)  (71) 
Class R  (720)  (4) 
Class Y  (1,424,368)  (288,518) 
From net realized short-term gain on investments     
Class A  (2,034,021)  — 
Class B  (6,839)  — 
Class C  (4,596)  — 
Class M  (5,919)  — 
Class R  (1,037)  — 
Class Y  (1,977,837)  — 
From net realized long-term gain on investments     
Class A  (2,511)  — 
Class B  (8)  — 
Class C  (6)  — 
Class M  (7)  — 
Class R  (1)  — 
Class Y  (2,442)  — 
Increase (decrease) from capital share transactions (Note 4)  (19,139,394)  132,895,703 
Total increase (decrease) in net assets  (20,608,427)  140,958,694 
 
NET ASSETS     
Beginning of period  140,958,694  — 
End of period  $120,350,267  $140,958,694 
Undistributed net investment income (loss), end of period  $ (125,772)  $ 981,679 
The accompanying notes are an integral part of these financial statements.     

59

Statement of changes in net assets (Continued)   
 
2010 Fund     
INCREASE IN NET ASSETS     
              For the period ended 
  1/31/06  7/31/05 
 
Operations:     
Net investment income  $ 1,212,014  $ 1,009,849 
Net realized gain on underlying Putnam fund shares  2,247,934  584,207 
Net unrealized appreciation (depreciation) on underlying Putnam fund shares  (1,125,070)  2,143,033 
Net increase in net assets resulting from operations  2,334,878  3,737,089 
Distributions to shareholders (Note 1)     
From net investment income     
Class A  (1,011,730)  (100,806) 
Class B  (1,365)  (9) 
Class C  (720)  (5) 
Class M  (2,636)  (3) 
Class R  (2,459)  (3) 
Class Y  (1,004,002)  (134,208) 
From net realized short-term gain on investments     
Class A  (665,612)  — 
Class B  (1,306)  — 
Class C  (535)  — 
Class M  (1,823)  — 
Class R  (1,537)  — 
Class Y  (608,117)  — 
From net realized long-term gain on investments     
Class A  (9,984)  — 
Class B  (20)  — 
Class C  (8)  — 
Class M  (27)  — 
Class R  (23)  — 
Class Y  (9,122)  — 
Increase from capital share transactions (Note 4)  3,196,896  80,435,862 
Total increase in net assets  2,210,748  83,937,917 
 
NET ASSETS     
Beginning of period  83,937,917  — 
End of period  $86,148,665  $83,937,917 
Undistributed net investment income, end of period  $ 16,264  $ 827,162 
The accompanying notes are an integral part of these financial statements.     

60

Statement of changes in net assets (Continued)   
 
Maturity Fund     
INCREASE (DECREASE) IN NET ASSETS     
           For the period ended 
  1/31/06  7/31/05 
 
Operations:     
Net investment income  $ 695,592  $ 615,875 
Net realized gain on underlying Putnam fund shares  738,549  242,186 
Net unrealized appreciation (depreciation) on underlying Putnam fund shares  (531,180)  706,118 
Net increase in net assets resulting from operations  902,961  1,564,179 
Distributions to shareholders (Note 1)     
From net investment income     
Class A  (484,778)  (240,377) 
Class B  (1,630)  (888) 
Class C  (14)  (8) 
Class M  (43)  (17) 
Class R  (16)  (12) 
Class Y  (295,261)  (347,085) 
From net realized short-term gain on investments     
Class A  (384,904)  — 
Class B  (1,631)  — 
Class C  (14)  — 
Class M  (40)  — 
Class R  (14)  — 
Class Y  (186,874)  — 
Increase (decrease) from capital share transactions (Note 4)  (1,917,273)  46,572,023 
Total increase (decrease) in net assets  (2,369,531)  47,547,815 
 
NET ASSETS     
Beginning of period (Note 5)  47,647,815  100,000 
End of period  $45,278,284  $47,647,815 
Undistributed net investment income (loss), end of period  $ (23,984)  $ 62,166 

The accompanying notes are an integral part of these financial statements.

61

Financial highlights             
 
 
Class A               
  INVESTMENT OPERATIONS    LESS DISTRIBUTIONS   
  Net    Net         
  Asset  Net  Realized and      From Net   
  Value,  Investment  Unrealized  Total from  From Net  Realized  Total 
  Beginning  Income  Gain on  Investment  Investment  Gain on  Distri- 
Period ended  of Period  (Loss)(a)  Investments  Operations  Income  Investments  butions 
 
Putnam RetirementReady               
2050 Fund               
January 31, 2006  $54.36  $0.76  $3.61  $4.37  $(0.80)  $(0.93)  $(1.73) 
July 31, 2005**  50.00  (0.01)  4.37  4.36  —  —  — 
 
2045 Fund               
January 31, 2006  70.75  0.87  5.08  5.95  (1.20)  (2.52)  (3.72) 
July 31, 2005 ***  63.42  0.28  7.63  7.91  (0.58)  —  (0.58) 
 
2040 Fund               
January 31, 2006  70.81  0.86  4.93  5.79  (1.18)  (2.69)  (3.87) 
July 31, 2005 ***  63.50  0.32  7.51  7.83  (0.52)  —  (0.52) 
 
2035 Fund               
January 31, 2006  69.50  0.85  4.48  5.33  (1.25)  (2.65)  (3.90) 
July 31, 2005 ***  62.61  0.38  6.96  7.34  (0.45)  —  (0.45) 
 
2030 Fund               
January 31, 2006  68.65  0.86  4.13  4.99  (1.28)  (2.37)  (3.65) 
July 31, 2005 ***  62.16  0.44  6.47  6.91  (0.42)  —  (0.42) 
 
2025 Fund               
January 31, 2006  72.26  0.92  3.99  4.91  (1.36)  (2.34)  (3.70) 
July 31, 2005 ***  65.75  0.52  6.39  6.91  (0.40)  —  (0.40) 
 
2020 Fund               
January 31, 2006  66.06  0.84  2.89  3.73  (1.32)  (1.72)  (3.04) 
July 31, 2005 ***  60.69  0.54  5.16  5.70  (0.33)  —  (0.33) 
 
2015 Fund               
January 31, 2006  67.28  0.89  2.10  2.99  (1.60)  (2.43)  (4.03) 
July 31, 2005 ***  62.62  0.66  4.28  4.94  (0.28)  —  (0.28) 
 
2010 Fund               
January 31, 2006  59.72  0.86  0.85  1.71  (1.52)  (1.02)  (2.54) 
July 31, 2005 ***  56.79  0.73  2.42  3.15  (0.22)  —  (0.22) 
 
Maturity Fund               
January 31, 2006  57.51  0.86  0.30  1.16  (0.97)  (0.75)  (1.72) 
July 31, 2005 ***  55.96  0.80  1.50  2.30  (0.75)  —  (0.75) 
 
See page 74 for Notes to Financial Highlights.           

The accompanying notes are an integral part of these financial statements.

62

        RATIOS AND SUPPLEMENTAL DATA 
    Total      Ratio of Net   
    Investment    Ratio of  Investment   
    Return at  Net Assets,  Expenses  Income (Loss)   
Redemption  Net Asset Value  Net Asset  End of Period  To Average Net  to Average  Portfolio 
Fees  End of Period  Value (%)(b)  (in thousands)  Assets (%)(c)(d)  Net Assets (%)(d)  Turnover (%) 
  
 
—  $57.00  8.13*  $1,240  0.18*  1.39*  68.51* 
—  54.36  8.72*  274  0.09*  (0.02)*  24.76* 
 
—  72.98  8.54*  11,912  0.18*  1.22*  36.08* 
—  70.75  12.51*  8,136  0.26*  0.41*  42.17* 
 
—  72.73  8.30*  16,743  0.18*  1.21*  39.73* 
—(e)  70.81  12.37*  12,230  0.26*  0.48*  39.79* 
 
—  70.93  7.79*  27,365  0.18*  1.21*  36.16* 
—  69.50  11.76*  21,274  0.26*  0.58*  36.45* 
 
—(e)  69.99  7.39*  37,369  0.18*  1.24*  33.81* 
—  68.65  11.14*  32,720  0.26*  0.66*  34.59* 
 
—(e)  73.47  6.90*  56,036  0.18*  1.27*  37.90* 
—(e)  72.26  10.53*  48,529  0.26*  0.75*  25.48* 
 
—  66.75  5.73*  72,610  0.18*  1.27*  32.56* 
—  66.06  9.41*  53,180  0.26*  0.85*  30.16* 
 
—  66.24  4.53*  58,891  0.18*  1.32*  35.21* 
—  67.28  7.90*  56,457  0.26*  1.01*  26.37* 
 
—  58.89  2.89*  44,096  0.18*  1.44*  37.94* 
—  59.72  5.55*  39,291  0.26*  1.26*  33.53* 
 
—  56.95  2.04*  30,107  0.18*  1.50*  34.68* 
—  57.51  4.15*  25,732  0.26*  1.41*  41.89* 

63

Financial highlights (Continued)           
 
 
Class B               
  INVESTMENT OPERATIONS    LESS DISTRIBUTIONS   
  Net    Net         
  Asset  Net  Realized and      From Net   
  Value,  Investment  Unrealized  Total from  From Net  Realized  Total 
  Beginning  Income  Gain on  Investment  Investment  Gain on  Distri- 
Period ended  of Period  (Loss)(a)  Investments  Operations  Income  Investments   butions
 
Putnam RetirementReady               
2050 Fund               
January 31, 2006  $54.25  $0.43  $3.74  $4.17  $(0.53)  $(0.93)  $(1.46) 
July 31, 2005**  50.00  (0.08)  4.33  4.25  —  —  — 
 
2045 Fund               
January 31, 2006  68.83  0.69  4.83  5.52  (0.91)  (2.52)  (3.43) 
July 31, 2005***  62.00  (0.24)  7.58  7.34  (0.51)  —  (0.51) 
 
2040 Fund               
January 31, 2006  68.82  0.57  4.77  5.34  (0.80)  (2.68)  (3.48) 
July 31, 2005***  62.00  (0.25)  7.52  7.27  (0.45)  —  (0.45) 
 
2035 Fund               
January 31, 2006  67.35  0.69  4.20  4.89  (1.08)  (2.65)  (3.73) 
July 31, 2005***  61.00  (0.08)  6.87  6.79  (0.44)  —  (0.44) 
 
2030 Fund               
January 31, 2006  67.07  0.63  3.97  4.60  (0.98)  (2.37)  (3.35) 
July 31, 2005***  61.00  (0.13)  6.55  6.42  (0.35)  —  (0.35) 
 
2025 Fund               
January 31, 2006  69.94  0.69  3.79  4.48  (1.09)  (2.34)  (3.43) 
July 31, 2005***  64.00  (0.05)  6.38  6.33  (0.39)  —  (0.39) 
 
2020 Fund               
January 31, 2006  64.94  0.62  2.80  3.42  (1.09)  (1.72)  (2.81) 
July 31, 2005***  60.00  0.08  5.18  5.26  (0.32)  —  (0.32) 
 
2015 Fund               
January 31, 2006  66.27  0.63  2.07  2.70  (1.40)  (2.43)  (3.83) 
July 31, 2005***  62.00  0.22  4.30  4.52  (0.25)  —  (0.25) 
 
2010 Fund               
January 31, 2006  58.59  0.61  0.85  1.46  (1.05)  (1.02)  (2.07) 
July 31, 2005***  56.00  0.37  2.42  2.79  (0.20)  —  (0.20) 
 
Maturity Fund               
January 31, 2006  57.54  0.64  0.31  0.95  (0.75)  (0.75)  (1.50) 
July 31, 2005***  56.00  0.47  1.51  1.98  (0.44)  —  (0.44) 
 
See page 74 for Notes to Financial Highlights.           

The accompanying notes are an integral part of these financial statements.

64

        RATIOS AND SUPPLEMENTAL DATA 
    Total      Ratio of Net   
    Investment    Ratio of  Investment   
    Return at  Net Assets,  Expenses  Income (Loss)   
Redemption  Net Asset Value  Net Asset  End of Period  To Average Net  to Average  Portfolio 
Fees  End of Period  Value (%)(b)  (in thousands)  Assets (%)(c)(d)  Net Assets (%)(d)  Turnover (%) 
  
 
—  $56.96  7.74*  $50  0.56*  0.79*  68.51* 
—  54.25  8.50*  31  0.28*  (0.16)*  24.76* 
 
—  70.92  8.15*  32  0.56*  1.00*  36.08* 
—  68.83  11.87*  17  0.82*  (0.37)*  42.17* 
 
—  70.68  7.89*  50  0.56*  0.82*  39.73* 
—(e)  68.82  11.75*  37  0.82*  (0.38)*  39.79* 
 
—  68.51  7.38*  182  0.56*  1.03*  36.16* 
—  67.35  11.15*  67  0.82*  (0.13)*  36.45* 
 
—(e)  68.32  6.96*  294  0.56*  0.94*  33.81* 
—  67.07  10.54*  225  0.82*  (0.20)*  34.59* 
 
—(e)  70.99  6.50*  413  0.56*  0.99*  37.90* 
—(e)  69.94  9.91*  211  0.82*  (0.08)*  25.48* 
 
—  65.55  5.33*  328  0.56*  0.96*  32.56* 
—  64.94  8.79*  241  0.82*  0.12*  30.16* 
 
—  65.14  4.15*  276  0.56*  0.96*  35.21* 
—  66.27  7.30*  165  0.83*  0.35*  26.37* 
 
—  57.98  2.50*  80  0.56*  1.04*  37.94* 
—  58.59  4.98*  84  0.82*  0.65*  33.53* 
 
—  56.99  1.66*  127  0.56*  1.11*  34.68* 
—  57.54  3.55*  124  0.82*  0.83*  41.89* 

65

Financial highlights (Continued)           
 
 
Class C               
  INVESTMENT OPERATIONS    LESS DISTRIBUTIONS   
  Net    Net         
  Asset  Net  Realized and      From Net   
  Value,  Investment  Unrealized  Total from  From Net  Realized  Total 
  Beginning  Income  Gain on  Investment  Investment  Gain on  Distri- 
Period ended  of Period  (Loss)(a)  Investments  Operations  Income  Investments butions 
 
Putnam RetirementReady               
2050 Fund               
January 31, 2006  $54.25  $0.51  $3.66  $4.17  $(0.51)  $(0.93)  $(1.44) 
July 31, 2005**  50.00  (0.08)  4.33  4.25  —  —  — 
 
2045 Fund               
January 31, 2006  68.84  0.49  5.03  5.52  (0.63)  (2.52)  (3.15) 
July 31, 2005***  62.00  (0.26)  7.61  7.35  (0.51)  —  (0.51) 
 
2040 Fund               
January 31, 2006  68.83  0.57  4.78  5.35  (0.64)  (2.69)  (3.33) 
July 31, 2005***  62.00  0.06  7.22  7.28  (0.45)  —  (0.45) 
 
2035 Fund               
January 31, 2006  67.41  0.55  4.35  4.90  (0.73)  (2.65)  (3.38) 
July 31, 2005***  61.00  0.10  6.69  6.79  (0.38)  —  (0.38) 
 
2030 Fund               
January 31, 2006  67.06  0.65  3.95  4.60  (1.10)  (2.37)  (3.47) 
July 31, 2005***  61.00  (0.06)  6.47  6.41  (0.35)  —  (0.35) 
 
2025 Fund               
January 31, 2006  70.00  0.57  3.91  4.48  (0.98)  (2.34)  (3.32) 
July 31, 2005***  64.00  (0.04)  6.36  6.32  (0.32)  —  (0.32) 
 
2020 Fund               
January 31, 2006  64.97  0.60  2.81  3.41  (0.99)  (1.72)  (2.71) 
July 31, 2005***  60.00  0.08  5.19  5.27  (0.30)  —  (0.30) 
 
2015 Fund               
January 31, 2006  66.25  0.67  2.01  2.68  (1.39)  (2.43)  (3.82) 
July 31, 2005***  62.00  0.25  4.28  4.53  (0.28)  —  (0.28) 
 
2010 Fund               
January 31, 2006  58.62  0.64  0.82  1.46  (1.35)  (1.02)  (2.37) 
July 31, 2005***  56.00  0.41  2.38  2.79  (0.17)  —  (0.17) 
 
Maturity Fund               
January 31, 2006  57.56  0.64  0.31  0.95  (0.75)  (0.75)  (1.50) 
July 31, 2005***  56.00  0.44  1.56  2.00  (0.44)  —  (0.44) 
 
See page 74 for Notes to Financial Highlights.           

The accompanying notes are an integral part of these financial statements.

66

        RATIOS AND SUPPLEMENTAL DATA 
    Total      Ratio of Net   
    Investment    Ratio of  Investment   
    Return at  Net Assets,  Expenses  Income (Loss)   
Redemption  Net Asset Value  Net Asset  End of Period  To Average Net  to Average  Portfolio 
Fees  End of Period  Value (%)(b)  (in thousands)  Assets (%)(c)(d)  Net Assets (%)(d)  Turnover (%) 
  
 
—  $56.98  7.74*  $1  0.56*  0.93*  68.51* 
—  54.25  8.50*  4  0.28*  (0.16)*  24.76* 
 
—  71.21  8.13*  9  0.56*  0.71*  36.08* 
—  68.84  11.89*  10  0.83*  (0.39)*  42.17* 
 
—  70.85  7.89*  1  0.56*  0.79*  39.73* 
—(e)  68.83  11.77*  1  0.82*  0.09*  39.79* 
 
—  68.93  7.38*  1  0.56*  0.82*  36.16* 
—  67.41  11.15*  1  0.82*  0.15*  36.45* 
 
—(e)  68.19  6.96*  39  0.56*  0.98*  33.81* 
—  67.06  10.52*  22  0.82*  (0.10)*  34.59* 
 
—(e)  71.16  6.50*  102  0.56*  0.81*  37.90* 
—(e)  70.00  9.89*  45  0.83*  (0.05)*  25.48* 
 
—  65.67  5.32*  102  0.56*  0.92*  32.56* 
—  64.97  8.79*  61  0.83*  0.12*  30.16* 
 
—  65.11  4.12*  131  0.56*  1.02*  35.21* 
—  66.25  7.32*  90  0.83*  0.38*  26.37* 
 
—  57.71  2.51*  34  0.56*  1.10*  37.94* 
—  58.62  4.98*  15  0.83*  0.71*  33.53* 
 
—  57.01  1.67*  1  0.56*  1.11*  34.68* 
—  57.56  3.59*  1  0.82*  0.81*  41.89* 

67

Financial highlights (Continued)           
 
 
Class M               
  INVESTMENT OPERATIONS    LESS DISTRIBUTIONS   
  Net    Net         
  Asset  Net  Realized and      From Net   
  Value,  Investment  Unrealized  Total from  From Net  Realized  Total 
  Beginning  Income  Gain on  Investment  Investment  Gain on  Distri- 
Period ended  of Period  (Loss)(a)  Investments  Operations  Income  Investments  butions 
 
Putnam RetirementReady               
2050 Fund               
January 31, 2006  $54.28  $0.49  $3.74  $4.23  $(0.59)  $(0.93)  $(1.52) 
July 31, 2005**  50.00  (0.05)  4.33  4.28  —  —  — 
 
2045 Fund               
January 31, 2006  68.94  0.58  5.04  5.62  (0.81)  (2.51)  (3.32) 
July 31, 2005***  62.00  (0.06)  7.54  7.48  (0.54)  —  (0.54) 
 
2040 Fund               
January 31, 2006  68.88  0.61  4.83  5.44  (0.83)  (2.69)  (3.52) 
July 31, 2005***  62.00  0.07  7.33  7.40  (0.52)  —  (0.52) 
 
2035 Fund               
January 31, 2006  67.47  0.68  4.31  4.99  (0.97)  (2.65)  (3.62) 
July 31, 2005***  61.00  (0.01)  6.92  6.91  (0.44)  —  (0.44) 
 
2030 Fund               
January 31, 2006  67.14  0.70  3.99  4.69  (1.05)  (2.37)  (3.42) 
July 31, 2005***  61.00  0.02  6.52  6.54  (0.40)  —  (0.40) 
 
2025 Fund               
January 31, 2006  70.06  0.72  3.85  4.57  (1.10)  (2.34)  (3.44) 
July 31, 2005***  64.00  0.11  6.35  6.46  (0.40)  —  (0.40) 
 
2020 Fund               
January 31, 2006  65.05  0.73  2.78  3.51  (1.14)  (1.72)  (2.86) 
July 31, 2005***  60.00  0.19  5.20  5.39  (0.34)  —  (0.34) 
 
2015 Fund               
January 31, 2006  66.38  0.75  2.03  2.78  (1.39)  (2.43)  (3.82) 
July 31, 2005***  62.00  0.35  4.30  4.65  (0.27)  —  (0.27) 
 
2010 Fund               
January 31, 2006  58.73  0.72  0.82  1.54  (1.45)  (1.02)  (2.47) 
July 31, 2005***  56.00  0.56  2.34  2.90  (0.17)  —  (0.17) 
 
Maturity Fund               
January 31, 2006  57.54  0.72  0.29  1.01  (0.83)  (0.75)  (1.58) 
July 31, 2005***  56.00  0.61  1.49  2.10  (0.56)  —  (0.56) 
 
See page 74 for Notes to Financial Highlights.           

The accompanying notes are an integral part of these financial statements.

68

        RATIOS AND SUPPLEMENTAL DATA 
    Total      Ratio of Net   
    Investment    Ratio of  Investment   
    Return at  Net Assets,  Expenses  Income (Loss)   
Redemption  Net Asset Value  Net Asset  End of Period  To Average Net  to Average  Portfolio 
Fees  End of Period  Value (%)(b)  (in thousands)  Assets (%)(c)(d)  Net Assets (%)(d)  Turnover (%) 
  
 
—  $56.99  7.87*  $3  0.43*  0.90*  68.51* 
—  54.28  8.56*  3  0.22*  (0.09)*  24.76* 
 
—  71.24  8.28*  8  0.43*  0.82*  36.08* 
—  68.94  12.09*  9  0.64*  (0.09)*  42.17* 
 
—  70.80  8.03*  12  0.43*  0.88*  39.73* 
—(e)  68.88  11.96*  11  0.64*  0.11*  39.79* 
 
—  68.84  7.51*  27  0.43*  1.00*  36.16* 
—  67.47  11.35*  20  0.64*  (0.02)*  36.45* 
 
—(e)  68.41  7.10*  52  0.43*  1.04*  33.81* 
—  67.14  10.74*  43  0.64*  0.03*  34.59* 
 
—(e)  71.19  6.62*  207  0.43*  1.02*  37.90* 
—(e)  70.06  10.12*  173  0.64*  0.17*  25.48* 
 
—  65.70  5.48*  382  0.43*  1.12*  32.56* 
—  65.05  9.00*  276  0.64*  0.30*  30.16* 
 
—  65.34  4.26*  161  0.43*  1.13*  35.21* 
—  66.38  7.52*  143  0.64*  0.54*  26.37* 
 
—  57.80  2.64*  119  0.43*  1.24*  37.94* 
—  58.73  5.19*  55  0.64*  0.97*  33.53* 
 
—  56.97  1.77*  2  0.43*  1.26*  34.68* 
—  57.54  3.76*  2  0.64*  1.07*  41.89* 

69

Financial highlights (Continued)           
 
 
 
Class R               
 
  INVESTMENT OPERATIONS    LESS DISTRIBUTIONS   
  Net    Net         
  Asset  Net  Realized and      From Net   
  Value,  Investment  Unrealized  Total from  From Net  Realized  Total 
  Beginning  Income  Gain on  Investment  Investment  Gain on  Distri- 
Period ended  of Period  (Loss)(a)  Investments  Operations  Income  Investments butions 
 
Putnam RetirementReady               
2050 Fund               
January 31, 2006  $54.32  $0.57  $3.74  $4.31  $(0.67)  $(0.93)  $(1.60) 
July 31, 2005**  50.00  (0.02)  4.34  4.32  —  —  — 
 
2045 Fund               
January 31, 2006 (2)  72.20  (0.03)  2.29  2.26  —  —  — 
December 19, 2005 (1)  69.06  1.48  1.66  3.14  —  —  — 
July 31, 2005***  62.00  0.30  7.32  7.62  (0.56)  —  (0.56) 
 
2040 Fund               
January 31, 2006 (2)  72.11  (0.02)  2.19  2.17  —  —  — 
December 19, 2005(1)  69.04  1.47  1.60  3.07  —  —  — 
July 31, 2005***  62.00  0.31  7.23  7.54  (0.50)  —  (0.50) 
 
2035 Fund               
January 31, 2006  67.61  0.59  4.44  5.03  —  (2.65)  (2.65) 
July 31, 2005***  61.00  0.35  6.70  7.05  (0.44)  —  (0.44) 
 
2030 Fund               
January 31, 2006  67.27  1.03  3.74  4.77  (1.33)  (2.37)  (3.70) 
July 31, 2005***  61.00  0.39  6.28  6.67  (0.40)  —  (0.40) 
 
2025 Fund               
January 31, 2006  70.21  0.89  3.80  4.69  (1.29)  (2.34)  (3.63) 
July 31, 2005***  64.00  0.42  6.17  6.59  (0.38)  —  (0.38) 
 
2020 Fund               
January 31, 2006  65.23  1.41  2.20  3.61  (1.42)  (1.72)  (3.14) 
July 31, 2005***  60.00  0.44  5.10  5.54  (0.31)  —  (0.31) 
 
2015 Fund               
January 31, 2006  66.54  1.08  1.81  2.89  (1.69)  (2.43)  (4.12) 
July 31, 2005***  62.00  0.55  4.25  4.80  (0.26)  —  (0.26) 
 
2010 Fund               
January 31, 2006  58.83  0.91  0.71  1.62  (1.60)  (1.02)  (2.62) 
July 31, 2005***  56.00  0.59  2.43  3.02  (0.19)  —  (0.19) 
 
Maturity Fund               
January 31, 2006  57.56  0.79  0.30  1.09  (0.90)  (0.75)  (1.65) 
July 31, 2005***  56.00  0.66  1.55  2.21  (0.65)  —  (0.65) 
 
See page 74 for Notes to Financial Highlights.           

The accompanying notes are an integral part of these financial statements.

70

        RATIOS AND SUPPLEMENTAL DATA 
    Total      Ratio of Net   
    Investment    Ratio of  Investment   
    Return at  Net Assets,  Expenses  Income (Loss)   
Redemption  Net Asset Value  Net Asset  End of Period  To Average Net  to Average  Portfolio 
Fees  End of Period  Value (%)(b)  (in thousands)  Assets (%)(c)(d)  Net Assets (%)(d)  Turnover (%) 
  
 
—  $57.03  8.00*  $1  0.31*  1.02*  68.51* 
—  54.32  8.64*  1  0.15*  (0.04)*  24.76* 
 
—  74.46  3.13 *  1  0.07*  (0.05)*  36.08* 
—  72.20  4.55*  —  0.23*  2.12*  36.08* 
—  69.06  12.33*  1  0.45*  (0.09)*  42.17* 
 
—  74.28  3.01*  1  0.07*  (0.03)*  39.73* 
—  72.11  4.45 *  —  0.23*  2.10 *  39.73* 
—(e)  69.04  12.20*  1  0.45*  0.47*  39.79* 
 
—  69.99  7.53*  2  0.31*  0.85*  36.16* 
—  67.61  11.58*  1  0.45*  0.52*  36.45* 
 
—(e)  68.34  7.21*  47  0.31*  1.54*  33.81* 
—  67.27  10.96*  1  0.45*  0.58*  34.59* 
 
—(e)  71.27  6.78*  3  0.31*  1.28*  37.90* 
—(e)  70.21  10.31*  1  0.45*  0.64*  25.48* 
 
—  65.70  5.62*  60  0.31*  2.22*  32.56* 
—  65.23  9.25*  1  0.45*  0.71*  30.16* 
 
—  65.31  4.42*  31  0.31*  1.66*  35.21* 
—  66.54  7.75*  1  0.45*  0.84*  26.37* 
 
—  57.83  2.78*  94  0.31*  1.61*  37.94* 
—  58.83  5.41*  1  0.45*  1.06*  33.53* 
 
—  57.00  1.91*  1  0.31*  1.36*  34.68* 
—  57.56  3.97*  1  0.45*  1.19*  41.89* 

71

Financial highlights (Continued)           
 
 
Class Y               
  INVESTMENT OPERATIONS    LESS DISTRIBUTIONS   
  Net    Net         
  Asset  Net  Realized and      From Net   
  Value,  Investment  Unrealized  Total from  From Net  Realized  Total 
  Beginning  Income  Gain on  Investment  Investment  Gain on  Distri- 
Period ended  of Period  (Loss)(a)  Investments  Operations  Income  Investments  butions  
 
Putnam RetirementReady               
2050 Fund               
January 31, 2006  $54.38  $0.79  $3.67  $4.46  $(0.84)  $(0.93)  $(1.77) 
July 31, 2005**  50.00  0.03  4.35  4.38  —  —  — 
 
2045 Fund               
January 31, 2006  76.88  0.98  5.59  6.57  (1.33)  (2.52)  (3.85) 
July 31, 2005***  68.76  0.46  8.26  8.72  (0.60)  —  (0.60) 
 
2040 Fund               
January 31, 2006  76.67  0.99  5.39  6.38  (1.31)  (2.69)  (4.00) 
July 31, 2005***  68.61  0.50  8.10  8.60  (0.54)  —  (0.54) 
 
2035 Fund               
January 31, 2006  75.37  0.98  4.90  5.88  (1.39)  (2.64)  (4.03) 
July 31, 2005***  67.76  0.56  7.52  8.08  (0.47)  —  (0.47) 
 
2030 Fund               
January 31, 2006  73.90  0.99  4.48  5.47  (1.42)  (2.37)  (3.79) 
July 31, 2005***  66.78  0.57  6.99  7.56  (0.44)  —  (0.44) 
 
2025 Fund               
January 31, 2006  72.50  0.97  4.05  5.02  (1.51)  (2.34)  (3.85) 
July 31, 2005***  65.87  0.63  6.42  7.05  (0.42)  —  (0.42) 
 
2020 Fund               
January 31, 2006  70.54  0.97  3.12  4.09  (1.46)  (1.72)  (3.18) 
July 31, 2005***  64.69  0.68  5.52  6.20  (0.35)  —  (0.35) 
 
2015 Fund               
January 31, 2006  67.48  0.93  2.16  3.09  (1.75)  (2.43)  (4.18) 
July 31, 2005***  62.71  0.77  4.30  5.07  (0.30)  —  (0.30) 
 
2010 Fund               
January 31, 2006  62.35  0.96  0.90  1.86  (1.65)  (1.02)  (2.67) 
July 31, 2005***  59.18  0.86  2.54  3.40  (0.23)  —  (0.23) 
 
Maturity Fund               
January 31, 2006  57.65  0.91  0.31  1.22  (1.04)  (0.75)  (1.79) 
July 31, 2005***  56.08  0.89  1.53  2.42  (0.85)  —  (0.85) 
 
See page 74 for Notes to Financial Highlights.           

The accompanying notes are an integral part of these financial statements.

72

        RATIOS AND SUPPLEMENTAL DATA 
    Total      Ratio of Net   
    Investment    Ratio of  Investment   
    Return at  Net Assets,  Expenses  Income (Loss)   
Redemption  Net Asset Value  Net Asset  End of Period  To Average Net  to Average  Portfolio 
Fees  End of Period  Value (%)(b)  (in thousands)  Assets (%)(c)(d)  Net Assets (%)(d)  Turnover (%) 
  
 
—  $57.07  8.29*  $334  0.05*  1.43*  68.51* 
—  54.38  8.76*  134  0.03*  0.05*  24.76* 
 
—  79.60  8.67*  8,379  0.05*  1.26*  36.08* 
—  76.88  12.72*  7,926  0.07*  0.63*  42.17* 
 
—  79.05  8.46*  10,212  0.05*  1.27*  39.73* 
—(e)  76.67  12.58*  8,983  0.07*  0.68*  39.79* 
 
—  77.22  7.93*  23,252  0.05*  1.29*  36.16* 
—  75.37  11.96*  20,730  0.07*  0.77*  36.45* 
 
—(e)  75.58  7.51*  38,948  0.05*  1.32*  33.81* 
—  73.90  11.35*  37,340  0.07*  0.81*  34.59* 
 
—(e)  73.67  7.04*  56,850  0.05*  1.32*  37.90* 
—(e)  72.50  10.72*  60,668  0.07*  0.90*  25.48* 
 
—  71.45  5.87*  70,172  0.05*  1.37*  32.56* 
—  70.54  9.60*  66,682  0.07*  1.01*  30.16* 
 
—  66.39  4.66*  60,860  0.05*  1.37*  35.21* 
—  67.48  8.10*  84,103  0.07*  1.18*  26.37* 
 
—  61.54  3.01*  41,727  0.05*  1.54*  37.94* 
—  62.35  5.76*  44,492  0.07*  1.42*  33.53* 
 
—  57.08  2.16*  15,040  0.05*  1.58*  34.68* 
—  57.65  4.34*  21,788  0.07*  1.56*  41.89* 

73

Notes to Financial Highlights

* Not annualized.

** For the period May 2, 2005 (commencement of operations) to July 31, 2005.

*** For the period November 1, 2004 (commencement of operations) to July 31, 2005.

(a) Per share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

(b) Total return does not reflect the effect of sales charges.

(c) Expense ratios do not include expenses of the underlying funds.

(d) Reflects an involuntary contractual expense limitation in effect during the period. As a result of such limitation the expenses for the period ended January 31, 2006 reflect a reduction of the following based on each funds’ average net assets.

  1/31/06  7/31/05 
Putnam RetirementReady 2050 Fund  4.24%  12.75% 
Putnam RetirementReady 2045 Fund  0.12%  0.57% 
Putnam RetirementReady 2040 Fund  0.09%  0.40% 
Putnam RetirementReady 2035 Fund  0.04%  0.20% 
Putnam RetirementReady 2030 Fund  0.02%  0.13% 
Putnam RetirementReady 2025 Fund  0.01%  0.08% 
Putnam RetirementReady 2020 Fund  0.01%  0.07% 
Putnam RetirementReady 2015 Fund  0.01%  0.06% 
Putnam RetirementReady 2010 Fund  0.02%  0.09% 
Putnam RetirementReady Maturity Fund  0.06%  0.28% 

(e) Amount represents less than $0.01 per share.

(1) For the period August 1, 2005 to December 19, 2005. All Class R shares for Fund 2045 and Fund 2040 were liquidated on December 19, 2005.

(2) For the period December 22, 2005 to January 31, 2006.

The accompanying notes are an integral part of these financial statements.

74

Notes to financial statements 1/31/06 (Unaudited)

Note 1: Significant accounting policies

Each of Putnam RetirementReady Funds: Putnam RetirementReady 2050 Fund, Putnam RetirementReady 2045 Fund, Putnam RetirementReady 2040 Fund, Putnam RetirementReady 2035 Fund, Putnam RetirementReady 2030 Fund, Putnam RetirementReady 2025 Fund, Putnam RetirementReady 2020 Fund, Putnam RetirementReady 2015 Fund, Putnam RetirementReady 2010 Fund and Putnam RetirementReady Maturity Fund, (collectively the “funds”) is a series of Putnam RetirementReady Funds, a Massachusetts business trust organized on June 8, 2004 (the “Trust”). Each fund is a diversified open-ended investment company under the Investment Company Act of 1940, as amended, each of which is represented by a series of shares of beneficial interest. Each fund except the Maturity Fund seeks capital appreciation and current income consistent with a decreasing emphasis on capital appreciation and an increasing emphasis on current income as it approaches its target date. The Maturity Fund seeks as high a rate of current income as Putnam Investment Management, LLC (“Putnam Management”) believes is consistent with preservation of capital.

Currently there are ten separate funds, of which nine have a target date specified by the calendar year in the name of each fund. The target dates are in five-year increments beginning with the year 2010. The tenth fund is named Putnam RetirementReady Maturity Fund. As the other funds reach their target date, they will merge with the Maturity Fund.

These financial statements report on each fund which may invest in the following Putnam Funds: Putnam Income Fund, Putnam Capital Opportunities Fund, The Putnam Fund for Growth and Income, Putnam Money Market Fund, Putnam International Equity Fund and Putnam Voyager Fund (the “underlying Putnam Funds”), which are managed by Putnam Management. The financial statements of the underlying Putnam Funds contain additional information about the expenses and investments of the underlying Putnam Funds and are available upon request.

Each fund offers class A, class B, class C, class M, class R and class Y shares. Class A and class M shares are sold with a maximum front-end sales charge of 5.25% and 3.25%, respectively, and do not pay a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, do not pay a front-end sales charge and are subject to a contingent deferred sales charge, if those shares are redeemed within six years of purchase. Class C shares have a one-year 1.00% contingent deferred sales charge and do not convert to class A shares. Class R shares, which are offered to qualified employee benefit plans are sold without a front-end sales charge or a contingent deferred sales charge. The expenses for class A, class B, class C, class M and class R shares may differ based on each class’ distribution fee, which is identified in Note 2. Class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C, class M and class R shares, but do not bear a distribution fee. Class Y shares are sold to certain eligible purchasers including certain defined contribution plans (including corporate IRAs), bank trust departments and trust companies.

A 2.00% redemption fee may apply to any shares that are redeemed (either by selling or exchanging into another fund) within 5 days of purchase. The redemption fee is accounted for as an addition to paid-in-capital.

Investment income, realized and unrealized gains and losses and expenses of each fund are borne pro-rata based on the relative net assets of each class to the total net assets of each fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. Shares of each class would receive their pro-rata share of the net assets of the fund, if

75

that fund were liquidated. In addition, the Trustees declare separate dividends on each class of shares.

The following is a summary of significant accounting policies consistently followed by the funds in the preparation of their financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

A) Security valuation The price of each fund’s shares is based on its net asset value (NAV), which is in turn based on the NAVs of the underlying Putnam Funds in which it invests. The NAV per share of each class equals the total value of its assets, less its liabilities, divided by the number of its outstanding shares. Shares are only valued as of the close of regular trading on the New York Stock Exchange each day the exchange is open. Each underlying Putnam Fund values its investments for which market quotations are readily available at market value. Each underlying fund values investments and assets at their fair value. Each underlying Putnam Fund translates prices for its investments quoted in foreign currencies into U.S. dollars at current exchange rates. As a result, changes in the value of those currencies in relation to the U.S. dollar may affect an underlying Putnam Fund’s NAV. In addition, the closing prices for securities in foreign markets or on foreign exchanges that close prior to the close of the New York Stock Exchange may not fully reflect events that occur after such close but before the close of the New York Stock Exchange. As a result, each underlying Putnam Fund has adopted fair value pricing procedures, which, among other things, require the funds, on certain days, to fair value foreign securities taking into account multiple factors, including movements in the U.S. securities markets. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent.

B) Security transactions and related investment income Security transactions, shares of the underlying Putnam Funds, are recorded on the trade date (date the order to buy or sell is executed). Gains or losses from the sale of the underlying Putnam Funds are determined on the identified cost basis. Income and capital gain distributions from the underlying Putnam funds are recorded on the ex-dividend date.

C) Federal taxes It is the policy of each fund to distribute all of its taxable income within the prescribed time and otherwise comply with the provisions of the Internal Revenue Code of 1986 (the “Code”) applicable to regulated investment companies. It is also the intention of each fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code, as amended. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains.

D) Distributions to shareholders Each fund normally distributes any net investment income and any related capital gains, annually, except the Maturity Fund which normally distributes any net investment income monthly and any net realized capital gains annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations.

76

The federal tax costs as of period end were as follows:       
 
          Cost for 
      Net    Federal 
  Unrealized  Unrealized  Unrealized    Income Tax 
  Appreciation  Depreciation  Appreciation    Purposes 
 
RetirementReady           
2050 Fund  $ 53,615  $ (8,017)  $ 45,598  $  1,552,628 
2045 Fund  1,155,403  (73,009)  1,082,394    19,265,946 
2040 Fund  1,532,870  (103,231)  1,429,639    25,599,598 
2035 Fund  2,747,180  (174,644)  2,572,536    48,273,068 
2030 Fund  4,382,265  (256,805)  4,125,460    72,649,885 
2025 Fund  6,090,417  (454,817)  5,635,600    108,015,262 
2020 Fund  5,757,909  (534,035)  5,223,874    138,476,109 
2015 Fund  3,713,114  (549,955)  3,163,159    117,228,162 
2010 Fund  1,376,423  (411,368)  965,055    85,211,405 
Maturity Fund  409,267  (271,897)  137,370    45,156,922 

E) Expenses of the trust Expenses directly charged or attributable to any fund will be paid from the assets of that fund. Generally, expenses of the trust will be allocated among and charged to the assets of each fund on a basis that the Trustees deem fair and equitable, which may be based on the relative assets of each fund or the nature of the services performed and relative applicability to each fund.

F) Organization and offering Expenses incurred by each fund in connection with its organization, its registration with the Securities and Exchange Commission and with various states and the initial public offering of its shares were $86,966 (2050 Fund; $76,976), except Maturity Fund which incurred $127,496 plus $12,500 in organization costs.

The organization fees are expensed as occurred and the offering costs will be amortized over a twelve month period on a straight line basis.

Note 2: Management fee, administrative services and other transactions

Putnam Management is paid for management and investment advisory services monthly at an annual rate of 0.05% based on the average net assets of each fund.

In order to limit each fund’s expenses, Putnam Management has agreed to limit its compensation (and, to the extent necessary, bear other expenses) through July 31, 2007, to the extent that each funds’ net expenses (exclusive of brokerage, interest, taxes, extraordinary expenses and fees and expenses of the underlying funds in which each fund invests and payments under the fund’s distribution plan) would not exceed an annual rate of 0.10% of each fund’s average net assets.

Each fund has adopted distribution plans (the “Plans”) with respect to its class A, class B, class C, class M and class R shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management, a wholly-owned subsidiary of Putnam, LLC and Putnam Retail Management GP, Inc., for services provided and expenses incurred in distributing shares of the funds. The Plans provide for payments by each fund to Putnam Retail Management at an annual rate of up to 0.35%, 1.00%, 1.00%, 1.00% and 1.00% of the average net assets attributable to class A, class B, class C, class M and class R shares, respectively. The Trustees have approved payment by the funds’ at an annual rate of 0.25%, 1.00%, 1.00%, 0.75% and 0.50% of the average net assets attributable to class A, class B, class C, class M, and class R shares, respectively.

77

For the period ended January 31, 2006, Putnam Retail Management, acting as underwriter, received net commissions from the sale of class A and class M shares, and received contingent deferred sales charges (CDSC) from redemptions of class B and class C shares, respectively:

  Class A  Class M       
  Net  Net  Class B    Class C 
  Commissions  Commissions         CDSC           CDSC          
 
RetirementReady           
2050 Fund                                                              $34      $—    $—  $315 
2045 Fund    45 —    —  — 
2040 Fund    128  —    —  — 
2035 Fund  1,787  7    —  — 
2030 Fund  353  1    —  346 
2025 Fund  234  197    —  — 
2020 Fund  164  270    105  — 
2015 Fund  329  226    220  — 
2010 Fund  74  10    —  — 
Maturity Fund  92  —    —  — 
Total  $3,240  $711    $325  $661 

A deferred sales charge of up to 1.00% and 0.65%
is assessed on certain redemptions of class A and
class M shares, respectively. For the period ended
January 31, 2006, Putnam Management acting as
underwriter, received no monies on class A and
class M redemptions, respectively.

Note 3: Purchases and sales of securities
During the period ended January 31, 2006, cost of
purchases and proceeds from sales of underlying
Putnam Funds were as follows:

  Purchases  Sales 
Retirement Ready     
2050 Fund  $ 1,741,532  $ 647,893 
2045 Fund  9,725,336  6,230,552 
2040 Fund  13,933,893  9,127,273 
2035 Fund  23,098,852  16,062,625 
2030 Fund  28,097,112  24,282,014 
2025 Fund  41,665,858  41,249,559 
2020 Fund  60,625,573  40,380,017 
2015 Fund  44,483,823  66,704,690 
2010 Fund  33,129,482  31,014,416 
Maturity Fund  15,894,938  18,021,365 

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Note 4: Capital shares

Class A and Class Y shares of all funds (with the exception of 2050 Fund) were formed with an initial in-kind contribution from another Putnam trust. At January 31, 2006, there was an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:

RetirementReady 2050 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  20,021  $1,112,266 
Shares issued     
in connection     
with reinvestment     
of distributions  477  26,522 
  20,498  1,138,788 
Shares     
repurchased  (3,775)  (210,489) 
Net increase  16,723  $ 928,299 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  5,756  $304,997 
Shares issued     
in connection     
with reinvestment     
of distributions  —  — 
  5,756  304,997 
Shares     
repurchased  (724)  (39,118) 
Net increase  5,032  $ 265,879 

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  284  $15,684 
Shares issued     
in connection     
with reinvestment     
of distributions  17  919 
  301  16,603 
Shares     
repurchased  (3)  (142) 
Net increase  298  $16,461 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  600  $30,564 
Shares issued     
in connection     
with reinvestment     
of distributions  —  — 
  600  30,564 
Shares     
repurchased  (20)  (1,085) 
Net increase  580  $29,479 

CLASS C  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  —  $ — 
Shares issued     
in connection     
with reinvestment     
of distributions  2  113 
  2  113 
Shares     
repurchased  (59)  (3,351) 
Net decrease  (57)  $(3,238) 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  78  $ 3,971 
Shares issued     
in connection     
with reinvestment     
of distributions  —  — 
  78  3,971 
Shares     
repurchased  —  — 
Net increase  78  $ 3,971 

79

CLASS M  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  —  $—                                                         
Shares issued     
in connection     
with reinvestment     
of distributions  2  90                                                  
  2  90 
Shares     
repurchased  —  — 
Net increase  2  $90 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  59  $2,997
Shares issued     
in connection     
with reinvestment     
of distributions  —  — 
  59  2,997
Shares     
repurchased  —  — 
Net increase  59  $2,997
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  —  $— 
Shares issued     
in connection     
with reinvestment     
of distributions  1  32 
  1  32 
Shares     
repurchased  —  — 
Net increase  1  $32 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  20  1,000 
Shares issued     
in connection     
with reinvestment     
of distributions  —  — 
  20  1,000
Shares     
repurchased  —  — 
Net increase  20  $1,000

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  9,019  $ 488,147 
Shares issued     
in connection     
with reinvestment     
of distributions  74  8,600 
  9,093  496,747 
Shares     
repurchased  (5,703)  (317,181) 
Net increase  3,390  $ 179,566 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  2,483  $ 131,152 
Shares issued     
in connection     
with reinvestment     
of distributions  —  — 
  2,483  131,152 
Shares     
repurchased  (28)  (1,487) 
Net increase  2,455  $ 129,665 
RetirementReady 2045 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  79,664  $ 5,730,138 
Shares issued     
in connection     
with reinvestment     
of distributions  7,269  516,875 
  86,933  6,247,013 
Shares     
repurchased  (38,709)  (2,753,714) 
Net increase  48,224  $ 3,493,299 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  139,349  $ 9,287,225 
Shares issued     
in connection     
with reinvestment     
of distributions  386  26,219 
  139,735  9,313,444 
Shares     
repurchased  (24,736)  (1,684,933) 
Net increase  114,999  $ 7,628,511 

80

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  377  $ 25,927 
Shares issued     
in connection     
with reinvestment     
of distributions  12  821 
  389  26,748 
Shares     
repurchased  (187)  (12,919) 
Net increase  202  $ 13,829 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  262  $ 17,051 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  8 
  262  17,059 
Shares     
repurchased  (13)  (839) 
Net increase  249  $ 16,220 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  1  $ 100 
Shares issued     
in connection     
with reinvestment     
of distributions  6  392 
  7  492 
Shares     
repurchased  (16)  (1,178) 
Net decrease  (9)  $ (686) 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  140  $ 9,149 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  8 
  140  9,157 
Shares     
repurchased  —  — 
Net increase  140  $ 9,157 

CLASS M  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  —    $  —  
Shares issued       
in connection       
with reinvestment       
of distributions  5  358  
  5  358  
Shares       
repurchased  (16)  (1,171) 
Net decrease  (11)  $   (813)  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  124  $ 8,100 
Shares issued       
in connection       
with reinvestment       
of distributions  —*  9  
  124  8,109  
Shares       
repurchased  —  —  
Net increase  124  $ 8,109 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  146   $ 9,866  
Shares issued       
in connection with       
reinvestment       
of distributions  —  —  
  146  9,866  
Shares       
repurchased  (147)  (10,564) 
Net decrease  (1)  $ (698)  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  16  $ 1,000  
Shares issued       
in connection       
with reinvestment       
of distributions  —*  9  
  16  1,009  
Shares       
repurchased  —  —  
Net increase  16  $    1,009  

81

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  26,356  $2,052,250 
Shares issued     
in connection     
with reinvestment     
of distributions  4,706  364,939 
  31,062  2,417,189 
Shares     
repurchased  (28,907)  (2,251,218) 
Net increase  2,155  $165,971 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  147,105  $10,617,638   
Shares issued     
in connection     
with reinvestment     
of distributions  456  33,627 
  147,561  10,651,265 
Shares     
repurchased  (44,461)  (3,276,807) 
Net increase  103,100  $7,374,458 
RetirementReady 2040 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  94,400  $6,785,900 
Shares issued     
in connection     
with reinvestment     
of distributions  10,838  768,863 
  105,238  7,554,763 
Shares     
repurchased  (47,732)  (3,386,609) 
Net increase  57,506  $4,168,154 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  201,751  $13,432,388
Shares issued     
in connection     
with reinvestment     
of distributions  595  40,513 
  202,346  13,472,901
Shares     
repurchased  (29,638)  (2,028,812) 
Net increase  172,708  $11,444,089                                                          

CLASS B  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  128  $ 8,915 
Shares issued       
in connection       
with reinvestment       
of distributions  31  2,108  
  159  11,023 
Shares       
repurchased  —*  (30)  
Net increase  159  $10,993 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  559  $36,439 
Shares issued       
in connection       
with reinvestment       
of distributions  —*  7  
  559  36,446 
Shares       
repurchased  (16)  (1,118) 
Net increase  543  $35,328 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  —  $ —  
Shares issued       
in connection       
with reinvestment       
of distributions  1  53  
  1  53  
Shares       
repurchased  —  —  
Net increase  1  $ 53  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  16  $1,000 
Shares issued       
in connection       
with reinvestment       
of distributions  —*  7  
  16  1,007  
Shares       
repurchased  —  —  
Net increase  16  $1,007 

82

CLASS M  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  14  $ 1,040 
Shares issued       
in connection       
with reinvestment       
of distributions  8  554  
  22  1,594  
Shares       
repurchased  (16)  (1,174)  
Net increase  6  $  420  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  163  $10,514 
Shares issued       
in connection       
with reinvestment       
of distributions  1  48  
  164  10,562 
Shares       
repurchased  —  —  
Net increase  164  $10,562 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  145  $ 9,866  
Shares issued       
in connection       
with reinvestment       
of distributions  —  —  
  145  9,866  
Shares       
repurchased  (146)  (10,555) 
Net decrease  (1)  $ (689)  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  16  $ 1,000  
Shares issued       
in connection       
with reinvestment       
of distributions  —*  8  
  16  1,008  
Shares       
repurchased  —  —  
Net increase  16  $ 1,008  

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  46,963  $3,626,823 
Shares issued     
in connection     
with reinvestment     
of distributions  5,791  446,361 
  52,754  4,073,184 
Shares     
repurchased  (40,711)  (3,160,028) 
Net increase  12,043  $913,156 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  178,174  $12,698,509 
Shares issued     
in connection     
with reinvestment     
of distributions  608  44,746 
  178,782  12,743,255 
Shares     
repurchased  (61,629)  (4,516,550) 
Net increase  117,153  $8,226,705 
RetirementReady 2035 Fund   
CLASS A  Shares  Amount
Six months ended 1/31/06:   
Shares sold  137,734  $9,677,615 
Shares issued     
in connection     
with reinvestment     
of distributions  18,656  1,293,241 
  156,390  10,970,856 
Shares     
repurchased  (76,683)  (5,326,478) 
Net increase  79,707  $5,644,378 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  360,622  $23,573,692   
Shares issued     
in connection     
with reinvestment     
of distributions  1,059  70,868 
  361,681  23,644,560 
Shares     
repurchased  (55,571)  (3,729,992) 
Net increase  306,110  $19,914,568                                                          

83

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  1,773  $120,268 
Shares issued     
in connection     
with reinvestment     
of distributions  127   
  1,900  128,717                                              
Shares     
repurchased  (232)  (15,815) 
Net increase  1,668  $112,902 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  1,020  $ 65,875 
Shares issued     
in connection     
with reinvestment     
of distributions  1   
  1,021  65,961 
Shares     
repurchased  (30)  (1,972) 
Net increase  991  $ 63,989 
 
CLASS C  Shares  Amount
Six months ended 1/31/06:   
Shares sold  —  $— 
Shares issued     
in connection     
with reinvestment     
of distributions  1  55 
  1  55 
Shares     
repurchased  —  — 
Net increase  1  $55 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  16  $1,000 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  6 
  16  1,006 
Shares     
repurchased  —  — 
Net increase  16  $1,006                                         

CLASS M  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  93  $6,374 
Shares issued     
in connection     
with reinvestment     
of distributions  18  1,218 
  111  7,592 
Shares     
repurchased  (19)  (1,301) 
Net increase  92  $6,291 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  320  $20,500
Shares issued     
in connection     
with reinvestment     
of distributions  —*  21 
  320  20,521 
Shares     
repurchased  (16)  (1,113) 
Net increase  304  $19,408
 
CLASS R  Shares  Amount  
Six months ended 1/31/06:   
Shares sold  541  $36,830 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  6 
  541  36,836 
Shares     
repurchased  (536)  (36,459) 
Net increase  5  $377 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  17  $1,000 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  7 
  17  1,007 
Shares     
repurchased  —  — 
Net increase  17  $1,007                                                      

84

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  89,533  $6,786,649 
Shares issued     
in connection     
with reinvestment     
of distributions  13,824  1,043,003 
  103,357  7,829,652 
Shares     
repurchased  (77,262)  (5,887,866) 
Net increase  26,095  $1,941,786 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  392,772  $27,498,593 
Shares issued     
in connection     
with reinvestment     
of distributions  1,366  98,944 
  394,138  27,597,537 
Shares     
repurchased  (119,116)  (8,593,017) 
Net increase  275,022  $19,004,520 
RetirementReady 2030 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  137,297  $9,519,225 
Shares issued     
in connection     
with reinvestment     
of distributions  26,897  1,841,348 
  164,194  11,360,573 
Shares     
repurchased  (106,831)  (7,351,680) 
Net increase  57,363  $4,008,893 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  586,145  $37,817,855 
Shares issued     
in connection     
with reinvestment     
of distributions  1,483  98,122 
  587,628  37,915,977 
Shares     
repurchased  (111,043)  (7,387,036) 
Net increase  476,585  $30,528,941                                                          

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  807  $ 54,106 
Shares issued     
in connection     
with reinvestment     
of distributions  206  13,804 
  1,013  67,910 
Shares     
repurchased  (74)  (4,982) 
Net increase  939  $ 62,928 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  3,414  $220,060 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  6 
  3,414  220,066 
Shares     
repurchased  (57)  (3,631) 
Net increase  3,357  $216,435 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  729  $ 49,215 
Shares issued     
in connection     
with reinvestment     
of distributions  31  2,019 
  760  51,234 
Shares     
repurchased  (523)  (35,993) 
Net increase  237  $ 15,241 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  332  $ 21,379 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  6 
  332  21,385 
Shares     
repurchased  —  — 
Net increase  332  $ 21,385 

85

CLASS M  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  116  $7,916 
Shares issued     
in connection with     
reinvestment     
of distributions  38  2,534 
  154  10,450 
Shares     
repurchased  (33)  (2,195) 
Net increase  121  $8,255 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  656  $42,065
Shares issued     
in connection with     
reinvestment     
of distributions  1  19 
  657  42,084 
Shares     
repurchased  (16)  (1,107) 
Net increase  641  $40,977 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  659  $44,156 
Shares issued     
in connection     
with reinvestment     
of distributions  35  2,341 
  694  46,497 
Shares     
repurchased  (17)  (1,211) 
Net increase  677  $45,286 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  16  $1,000 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  6 
  16  1,006 
Shares     
repurchased  —  — 
Net increase  16  $1,006                                                           

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  106,689  $7,912,700 
Shares issued     
in connection     
with reinvestment     
of distributions  23,565  1,741,944 
  130,254  9,654,644 
Shares     
repurchased  (120,193)  (8,976,697) 
Net increase  10,061  $677,947 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  660,572  $45,720,136 
Shares issued     
in connection     
with reinvestment     
of distributions  1,970  140,095 
  662,542  45,860,231 
Shares     
repurchased  (157,294)  (11,151,475)
Net increase  505,248  $34,708,756   
RetirementReady 2025 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  189,977  $13,857,665 
Shares issued     
in connection     
with reinvestment     
of distributions  36,976  2,661,545 
  226,953  16,519,210 
Shares     
repurchased  (135,819)  (9,813,320) 
Net increase  91,134  $6,705,890
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  749,266  $50,939,822 
Shares issued     
in connection with     
reinvestment     
of distributions  2,245  156,581 
  751,511  51,096,403 
Shares     
repurchased  (79,886)  (5,588,087) 
Net increase  671,625  $45,508,316                                                                

86

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  3,652  $255,730 
Shares issued     
in connection     
with reinvestment     
of distributions  223  15,546 
  3,875  271,276 
Shares     
repurchased  (1,077)  (75,418) 
Net increase  2,798  $195,858 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  3,335  $224,324 
Shares issued     
in connection     
with reinvestment     
of distributions  1  79 
  3,336  224,403 
Shares     
repurchased  (315)  (21,538) 
Net increase  3,021  $202,865 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  878  $ 61,373 
Shares issued     
in connection     
with reinvestment     
of distributions  34  2,389 
  912  63,762 
Shares     
repurchased  (120)  (8,542) 
Net increase  792  $ 55,220 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  805  $ 53,851 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  5 
  805  53,856 
Shares     
repurchased  (162)  (10,883) 
Net increase  643  $ 42,973 

CLASS M  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  1,431  $ 99,940 
Shares issued     
in connection     
with reinvestment     
of distributions  134  9,360 
  1,565  109,300 
Shares     
repurchased  (1,115)  (78,895) 
Net increase  450  $ 30,405 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  2,595  $174,769 
Shares issued     
in connection     
with reinvestment     
of distributions  3  210 
  2,598  174,979 
Shares     
repurchased  (136)  (9,205) 
Net increase  2,462  $165,774 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  18  $1,293 
Shares issued     
in connection     
with reinvestment     
of distributions  2  107 
  20  1400 
Shares     
repurchased  —*  (15) 
Net increase  20  $1,385 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  17  $1,100 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  6 
  17  1,106 
Shares     
repurchased  —  — 
Net increase  17  $1,106 

87

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  162,337  $ 11,757,712 
Shares issued     
in connection     
with reinvestment     
of distributions  37,104  2,677,422 
  199,441  14,435,134 
Shares     
repurchased  (264,562)  (19,350,874) 
Net decrease  (65,121)  $ (4,915,740) 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  1,066,126  $ 72,184,005 
Shares issued     
in connection     
with reinvestment     
of distributions  3,473  242,685 
  1,069,599  72,426,690 
Shares     
repurchased  (232,832)  (16,221,045) 
Net increase  836,767  $ 56,205,645 
RetirementReady 2020 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  392,935  $ 26,108,799 
Shares issued     
in connection     
with reinvestment     
of distributions  40,617  2,667,365 
  433,552  28,776,164 
Shares     
repurchased  (150,778)  (9,948,336) 
Net increase  282,774  $ 18,827,828 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  966,386  $ 60,449,034 
Shares issued     
in connection     
with reinvestment     
of distributions  2,435  155,610 
  968,821  60,604,644 
Shares     
repurchased  (163,745)  (10,502,397) 
Net increase  805,076  $ 50,102,247 

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  1,659  $108,988 
Shares issued     
in connection     
with reinvestment     
of distributions  212  13,699 
  1,871  122,687 
Shares     
repurchased  (569)  (36,973) 
Net increase  1,302  $ 85,714 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  3,870  $241,046 
Shares issued     
in connection     
with reinvestment     
of distributions  1  90 
  3,871  241,136 
Shares     
repurchased  (165)  (10,331) 
Net increase  3,706  $230,805 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  756  $49,118 
Shares issued     
in connection     
with reinvestment     
of distributions  46  2,957 
  802  52,075 
Shares     
repurchased  (182)  (12,000) 
Net increase  620  $40,075 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  1,047  $65,321 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  14 
  1,047  65,335 
Shares     
repurchased  (112)  (7,088) 
Net increase  935  $58,247 

88

CLASS M  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  2,081  $136,227 
Shares issued     
in connection     
with reinvestment     
of distributions  251  16,199 
  2,332  152,426 
Shares     
repurchased  (759)  (49,720) 
Net increase  1,573  $102,706 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  4,399  $275,169 
Shares issued     
in connection     
with reinvestment     
of distributions  2  151 
  4,401  275,320 
Shares     
repurchased  (163)  (10,340) 
Net increase  4,238  $264,980 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  853  $56,823 
Shares issued     
in connection     
with reinvestment     
of distributions  37  2,404 
  890  59,227 
Shares     
repurchased  —  — 
Net increase  890  $59,227 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  17  $ 1,000 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  5 
  17  1,005 
Shares     
repurchased  —  — 
Net increase  17  $ 1,005 

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  233,246  $ 16,412,449 
Shares issued     
in connection     
with reinvestment     
of distributions  38,855  2,730,709 
  272,101  19,143,158 
Shares     
repurchased  (235,213)  (16,647,713) 
Net increase  36,888  $ 2,495,445 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  1,201,457  $ 79,676,616 
Shares issued     
in connection     
with reinvestment     
of distributions  3,409  232,313 
  1,204,866  79,908,929 
Shares     
repurchased  (259,586)  (17,614,284) 
Net increase  945,280  $ 62,294,645 
RetirementReady 2015 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  195,099  $ 13,073,793 
Shares issued     
in connection     
with reinvestment     
of distributions  51,641  3,377,298 
  246,740  16,451,091 
Shares     
repurchased  (196,787)  (13,113,328) 
Net increase  49,953  $ 3,337,763 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  967,008  $ 61,873,192 
Shares issued     
in connection     
with reinvestment     
of distributions  2,324  151,730 
  969,332  62,024,922 
Shares     
repurchased  (130,178)  (8,533,217) 
Net increase  839,154  $ 53,491,705 

89

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  1,928  $126,482 
Shares issued     
in connection     
with reinvestment     
of distributions  168  10,782 
  2,096  137,264 
Shares     
repurchased  (355)  (23,281) 
Net increase  1,741  $113,983 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  2,544  $165,518 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  23 
  2,544  165,541 
Shares     
repurchased  (52)  (3,423) 
Net increase  2,492  $162,118 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  638  $42,005 
Shares issued     
in connection     
with reinvestment     
of distributions  113  7,235 
  751  49,240 
Shares     
repurchased  (95)  (6,321) 
Net increase  656  $42,919 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  1,432  $91,452 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  46 
  1,432  91,498 
Shares     
repurchased  (71)  (4,656) 
Net increase  1,361  $86,842 

CLASS M  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  1,887  $ 126,314 
Shares issued     
in connection     
with reinvestment     
of distributions  144  9,311 
  2,031  135,625 
Shares     
repurchased  (1,711)  (113,974) 
Net increase  320  $ 21,651 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  2,162  $ 138,387 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  71 
  2,162  138,458 
Shares     
repurchased  (16)  (1,075) 
Net increase  2,146  $ 137,383 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  443  $29,267 
Shares issued     
in connection     
with reinvestment     
of distributions  27  1,758 
  470  31,025 
Shares     
repurchased  (16)  (1,103) 
Net increase  454  $29,922 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  16  $ 1,000 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  4 
  16  1,004 
Shares     
repurchased  —  — 
Net increase  16  $ 1,004 

90

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  188,651  $ 12,481,471 
Shares issued     
in connection     
with reinvestment     
of distributions  51,956  3,404,647 
  240,607  15,886,118 
Shares     
repurchased  (570,190)  (38,571,750) 
Net decrease  (329,583)  $ (22,685,632) 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  1,580,630  $100,777,637 
Shares issued     
in connection     
with reinvestment     
of distributions  4,412  288,518 
  1,585,042  101,066,155 
Shares     
repurchased  (338,707)  (22,049,504) 
Net increase  1,246,335  $ 79,016,651 
RetirementReady 2010 Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  222,961  $13,219,419 
Shares issued     
in connection     
with reinvestment     
of distributions  28,873  1,687,326 
  251,834  14,906,745 
Shares     
repurchased  (160,978)  (9,537,788) 
Net increase  90,856  $ 5,368,957 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  792,156  $45,695,501 
Shares issued     
in connection     
with reinvestment     
of distributions  1,730  100,806 
  793,886  45,796,307 
Shares     
repurchased  (135,996)  (7,981,501) 
Net increase  657,890  $37,814,806 

CLASS B  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  524  $ 30,712 
Shares issued     
in connection     
with reinvestment     
of distributions  47  2,691 
  571  33,403 
Shares     
repurchased  (633)  (37,319) 
Net decrease  (62)  $ (3,916) 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  2,377  $135,908 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  9 
  2,377  135,917 
Shares     
repurchased  (944)  (53,661) 
Net increase  1,433  $ 82,256 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  372  $21,798 
Shares issued     
in connection     
with reinvestment     
of distributions  22  1,263 
  394  23,061 
Shares     
repurchased  (59)  (3,451) 
Net increase  335  $19,610 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  386  $22,060 
Shares issued     
in connection     
with reinvestment     
of distributions  —*  5 
  386  22,065 
Shares     
repurchased  (137)  (7,932) 
Net increase  249  $14,133 

91

CLASS M  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  1,206  $ 70,705 
Shares issued       
in connection       
with reinvestment       
of distributions  78  4,486  
  1,284  75,191  
Shares       
repurchased  (159)  (9,271)  
Net increase  1,125  $ 65,920 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  1,180  $ 67,786 
Shares issued       
in connection       
with reinvestment       
of distributions  —*  3  
  1,180  67,789  
Shares       
repurchased  (252)  (14,775) 
Net increase  928  $ 53,014 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  1,555  $90,509 
Shares issued       
in connection       
with reinvestment       
of distributions  70  4,019   
  1,625  94,528  
Shares       
repurchased  (18)  (1,099)  
Net increase  1,607  $93,429 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  18  $ 1,000  
Shares issued       
in connection       
with reinvestment       
of distributions  —*  3  
  18  1,003  
Shares       
repurchased  —  —  
Net increase  18  $ 1,003  

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  147,031  $ 9,054,437 
Shares issued     
in connection     
with reinvestment     
of distributions  26,556  1,621,241 
  173,587  10,675,678 
Shares     
repurchased  (209,172)  (13,022,782) 
Net decrease  (35,585)  $ (2,347,104) 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  973,198  $ 58,232,489 
Shares issued     
in connection     
with reinvestment     
of distributions  2,210  134,208 
  975,408  58,366,697 
Shares     
repurchased  (261,767)  (15,896,047) 
Net increase  713,641  $ 42,470,650 
RetirementReady Maturity Fund   
CLASS A  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  161,037  $ 9,223,407 
Shares issued     
in connection     
with reinvestment     
of distributions  15,291  869,682 
  176,328  10,093,089 
Shares     
repurchased  (95,073)  (5,428,929) 
Net increase  81,255  $ 4,664,160 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  533,275  $30,165,928 
Shares issued     
in connection     
with reinvestment     
of distributions  4,211  239,131 
  537,486  30,405,059 
Shares     
repurchased  (90,078)  (5,120,464) 
Net increase  447,408  $25,284,595 

92

CLASS B  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  2  $ 149  
Shares issued       
in connection       
with reinvestment       
of distributions  57  3,261 
  59  3,410 
Shares       
repurchased  —*  (10)  
Net increase  59  $ 3,400 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  2,292  $128,404 
Shares issued       
in connection       
with reinvestment       
of distributions  14  787  
  2,306  129,191 
Shares       
repurchased  (143)  (8,235) 
Net increase  2,163  $120,956 
 
CLASS C  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  —*  $ —  
Shares issued       
in connection       
with reinvestment       
of distributions  —*  28  
  —*  28  
Shares       
repurchased  —  —  
Net increase  —  $ 28  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  18  $1,000 
Shares issued       
in connection       
with reinvestment       
of distributions  —*  8  
  18  1,008 
Shares       
repurchased  —   —  
Net increase  18  $1,008 

CLASS M  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  18  $ 1,001 
Shares issued       
in connection       
with reinvestment       
of distributions  2  83  
  20  1,084  
Shares       
repurchased  (18)  (1,000) 
Net increase  2  $ 84  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  53  $ 3,000 
Shares issued       
in connection       
with reinvestment       
of distributions  —  17  
  53  3,017  
Shares       
repurchased  (17)  (1,000) 
Net increase  36  $ 2,017 
 
CLASS R  Shares  Amount 
Six months ended 1/31/06:     
Shares sold  —*  $ —  
Shares issued       
in connection       
with reinvestment       
of distributions  1  30  
  1  30  
Shares       
repurchased  —  —  
Net increase  1  $ 30  
For the period 11/1/04 (commencement of operations) 
to 7/31/05:       
Shares sold  18  $1,000 
Shares issued       
in connection       
with reinvestment       
of distributions  —*  12  
  18  1,012  
Shares       
repurchased  —  —  
Net increase  18  $1,012 

93

CLASS Y  Shares  Amount 
Six months ended 1/31/06:   
Shares sold  61,449  $ 3,515,467 
Shares issued     
in connection     
with reinvestment     
of distributions  8,433  482,135 
  69,882  3,997,602 
Shares     
repurchased  (184,364)  (10,582,577) 
Net decrease  (114,482)  $ (6,584,975) 
For the period 11/1/04 (commencement of operations) 
to 7/31/05:     
Shares sold  567,075  $ 32,018,267 
Shares issued     
in connection     
with reinvestment     
of distributions  6,108  347,085 
  573,183  32,365,352 
Shares     
repurchased  (195,227)  (11,102,917) 
Net increase  377,956  $ 21,262,435 

* Represents fractional shares issued in connection with reinvestment of distributions.

94

Note 5: Initial capitalization and offering of shares

The Trust was established as a Massachusetts business trust on June 8, 2004. During the period June 8, 2004, to September 14, 2004, the Trust had no operations other than those related to organizational matters, including the initial capital contribution of $100,000 and the issuance of 1,786 Putnam RetirementReady Maturity Fund class B shares to Putnam LLC. The Trust commenced investment operations on November 1, 2004.

At January 31, 2006, Putnam LLC owned the following shares of each fund:     
 
    Percentage of    Value at 
  Shares owned  shares outstanding    January 31, 2006
 
RetirementReady         
2050 Fund class C  21  100%  $  1,169 
2050 Fund class M  21  34%    1,171 
2050 Fund class R  21  100%    1,173 
2045 Fund class R  15  100%    1,080 
2040 Fund class C  17  100%    1,206 
2040 Fund class R  15  100%    1,078 
2035 Fund class C  17  100%    1,194 
2035 Fund class R  15  68%    1,023 
2030 Fund class C  17  3%    1,182 
2025 Fund class R  17  46%    1,178 
2020 Fund class R  17  2%    1,154 
Maturity Fund class B  1,847  83%    105,262 
Maturity Fund class C  18  100%    1,053 
Maturity Fund class M  19  50%    1,056 
Maturity Fund class R  19  100%    1,060 

Note 6: Transactions with affiliated issuers

Transactions during the period with companies in which the fund owned at least 5% or more of the outstanding voting securities, or a company which is under common ownership or control were as follows:

RetirementReady 2050 Fund         
Affiliates  Purchase cost  Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $ 271,343  $ 95,853  $ 1,212  $ 241,289 
Putnam Fund for Growth and Income  420,338  159,514  1,911  376,009 
Putnam International Equity Fund  503,584  179,147  7,561  487,097 
Putnam Voyager Fund  415,794  156,590  2,421  376,754 
Putnam Income Fund  66,863  26,083  709  57,908 
Putnam Money Market Fund  62,523  7,676  521  59,169 
Totals  $1,740,445  $624,863  $14,335  $1,598,226 
 
Market values are shown for those securities affiliated at period end.     

95

RetirementReady 2045 Fund         
Affiliates  Purchase cost  Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $1,696,735  $ 863,951  $ 20,338  $ 3,155,698 
Putnam Fund for Growth and Income  2,446,503  1,422,851  34,377  4,993,951 
Putnam International Equity Fund  2,729,741  1,791,993  119,222  6,252,314 
Putnam Voyager Fund  2,309,011  1,413,382  41,366  4,968,346 
Putnam Income Fund  418,236  238,665  13,887  786,955 
Putnam Money Market Fund  125,109  92,371  3,243  191,076 
Totals  $9,725,335  $5,823,213  $232,433  $20,348,340 
 
Market values are shown for those securities affiliated at period end.     
 
RetirementReady 2040 Fund         
Affiliates  Purchase cost  Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $ 2,226,076  $1,353,650  $ 27,319  $ 3,916,251 
Putnam Fund for Growth and Income  3,210,367  2,053,606  45,759  6,379,064 
Putnam International Equity Fund  3,639,482  2,355,830  151,404  8,037,749 
Putnam Voyager Fund  3,105,489  2,109,815  55,594  6,348,698 
Putnam Income Fund  1,001,439  438,234  23,996  1,569,329 
Putnam Money Market Fund  751,039  179,051  6,422  778,146 
Totals  $13,933,892  $8,490,186  $310,494  $27,029,237 
 
Market values are shown for those securities affiliated at period end.     
 
RetirementReady 2035 Fund         
Affiliates  Purchase cost  Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $ 3,509,710  $ 2,255,083  $ 48,353  $ 6,858,907 
Putnam Fund for Growth and Income  5,184,214  3,066,609  85,547  12,026,252 
Putnam International Equity Fund  5,291,163  4,037,551  266,677  13,594,352 
Putnam Voyager Fund  4,882,949  3,569,656  101,244  11,468,450 
Putnam Income Fund  2,976,303  1,241,274  74,852  4,931,715 
Putnam Money Market Fund  1,254,514  508,788  25,150  1,965,928 
Totals  $23,098,853  $14,678,961  $601,823  $50,845,604 
 
Market values are shown for those securities affiliated at period end.     

96

RetirementReady 2030 Fund             
Affiliates    Purchase cost   Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $  4,089,108  $  3,246,915  $ 72,941  $ 9,584,951 
Putnam Fund for Growth and Income    5,691,798    4,938,250  134,251  16,668,781 
Putnam International Equity Fund    5,946,308    5,369,752  398,746  19,790,252 
Putnam Voyager Fund    5,375,370    5,133,614  157,619  16,588,759 
Putnam Income Fund    5,054,489    2,658,988  178,898  10,425,382 
Putnam Money Market Fund    1,940,038    948,979  52,978  3,717,220 
Totals  $  28,097,111 $ 22,296,498  $995,433  $76,775,345 

Market values are shown for those securities affiliated at period end.       
 
RetirementReady 2025 Fund               
Affiliates  Purchase cost    Sales cost    Investment income  Market value 
 
Putnam Capital Opportunities Fund  $  5,588,329  $  4,964,328  $  100,217  $ 13,034,107 
Putnam Fund for Growth and Income    8,013,069    7,971,055    196,028  23,601,336 
Putnam International Equity Fund    8,091,921    8,283,256    546,280  27,009,883 
Putnam Voyager Fund    7,551,827    8,236,289    224,440  23,487,158 
Putnam Income Fund    7,514,301    5,537,375    331,207  17,673,760 
Putnam Money Market Fund    4,906,411    2,453,782    122,357  8,844,618 
Totals  $ 41,665,858  $ 37,446,085  $ 1,520,529  $113,650,862 

Market values are shown for those securities affiliated at period end.         
 
RetirementReady 2020 Fund               
Affiliates  Purchase cost    Sales cost  Investment income    Market value 
 
Putnam Capital Opportunities Fund  $ 7,078,927  $  4,701,938  $  105,098  $  15,043,849 
Putnam Fund for Growth and Income  10,990,974    7,347,060    208,623    28,563,157 
Putnam International Equity Fund  8,376,199    6,788,527    464,679    23,839,039 
Putnam Voyager Fund  10,494,692    7,641,665    245,053    28,424,487 
Putnam Income Fund  17,016,361    7,479,956    541,829    33,739,391 
Putnam Money Market Fund  6,662,000    3,155,013    200,252    14,090,060 
Totals  $60,619,153  $ 37,114,159  $ 1,765,534  $  143,699,983 
 
Market values are shown for those securities affiliated at period end.         

97

RetirementReady 2015 Fund           
Affiliates    Purchase cost Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $  5,058,751  $ 5,712,051  $ 90,400  $ 12,679,781 
Putnam Fund for Growth and Income    6,474,503  10,772,859  190,053  20,443,792 
Putnam International Equity Fund    3,496,076  8,247,081  281,119  11,308,668 
Putnam Voyager Fund    6,181,282  11,143,352  198,784  20,345,770 
Putnam Income Fund    15,017,094  17,807,611  733,862  36,639,374 
Putnam Money Market Fund    8,256,116  8,671,984  311,188  18,973,936 
Totals  $ 44,483,822  $62,354,938  $1,805,406  $120,391,321 
 
Market values are shown for those securities affiliated at period end.     
 
RetirementReady 2010 Fund           
Affiliates    Purchase cost Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $  2,520,073  $ 2,670,805  $ 43,870  $ 5,485,134 
Putnam Fund for Growth and Income    3,587,284  3,999,573  87,776  10,404,551 
Putnam International Equity Fund    950,675  1,777,994  71,035  2,716,489 
Putnam Voyager Fund    3,446,346  4,165,331  99,512  10,355,072 
Putnam Income Fund    13,833,225  10,663,420  652,687  34,953,995 
Putnam Money Market Fund    8,791,878  6,496,380  349,960  22,261,219 
Totals  $  33,129,481 $29,773,503  $1,304,840  $86,176,460 
 
Market values are shown for those securities affiliated at period end.     
 
RetirementReady Maturity Fund           
Affiliates    Purchase cost Sales cost  Investment income  Market value 
 
Putnam Capital Opportunities Fund  $  1,043,965  $ 936,606  $ 17,344  $ 2,409,742 
Putnam Fund for Growth and Income    1,546,513  1,741,053  38,364  4,573,508 
Putnam International Equity Fund    —  —  —  — 
Putnam Voyager Fund    1,462,639  1,795,673  42,374  4,552,192 
Putnam Income Fund    7,245,776  7,918,903  417,743  20,220,494 
Putnam Money Market Fund    4,596,045  5,294,954  238,893  13,538,356 
Totals  $  15,894,938  $17,687,189  $754,718  $45,294,292 
 
Market values are shown for those securities affiliated at period end.     

98

Note 7: Regulatory matters and litigation

Putnam Management has entered into agreements with the Securities and Exchange Commission and the Massachusetts Securities Division settling charges connected with excessive short-term trading by Putnam employees and, in the case of the charges brought by the Massachusetts Securities Division, by participants in some Putnam-administered 401(k) plans. Pursuant to these settlement agreements, Putnam Management will pay a total of $193.5 million in penalties and restitution, with $153.5 million being paid to certain open-end funds and their shareholders. The restitution amount will be allocated to shareholders pursuant to a plan developed by an independent consultant, with payments to shareholders following approval of the plan by the SEC and the Massachusetts Securities Division.

The Securities and Exchange Commission’s and Massachusetts Securities Division’s allegations and related matters also serve as the general basis for numerous lawsuits, including purported class action lawsuits filed against Putnam Management and certain related parties, including certain Putnam funds. Putnam Management will bear any costs incurred by Putnam funds in connection with these lawsuits. Putnam Management believes that the likelihood that the pending private lawsuits and purported class action lawsuits will have a material adverse financial impact on the trust is remote, and the pending actions are not likely to materially affect its ability to provide investment management services to its clients, including the Putnam funds.

Putnam Management and Putnam Retail Management are named as defendants in a civil suit in which the plaintiffs allege that the management and distribution fees paid by certain Putnam funds were excessive and seek recovery under the Investment Company Act of 1940. Putnam Management and Putnam Retail Management have contested the plaintiffs’ claims and the matter is currently pending in the U.S. District Court for the District of Massachusetts. Based on currently available information, Putnam Management believes that this action is without merit and that it is unlikely to have a material effect on Putnam Management’s and Putnam Retail Management’s ability to provide services to their clients, including the trust.

99

Brokerage commissions
(Unaudited)

Brokerage commissions are paid to firms that execute trades on behalf of your fund. When choosing these firms, Putnam is required by law to seek the best execution of the trades, taking all relevant factors into consideration, including expected quality of execution and commission rate. The RetirementReady Funds, however, invest in shares of other Putnam mutual funds, rather than in stocks and bonds. For that reason, the funds do not incur brokerage charges.

100

Fund information

Founded over 65 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage over 100 mutual funds in growth, value, blend, fixed income, and international.

Investment Manager
Putnam Investment
Management, LLC
One Post Office Square
Boston, MA 02109

Marketing Services
Putnam Retail Management
One Post Office Square
Boston, MA 02109

Custodian
Putnam Fiduciary
Trust Company

Legal Counsel
Ropes & Gray LLP

Trustees
John A. Hill, Chairman
Jameson Adkins Baxter,
Vice Chairman
Charles B. Curtis
Myra R. Drucker
Charles E. Haldeman, Jr.
Paul L. Joskow
Elizabeth T. Kennan
John H. Mullin, III
Robert E. Patterson
George Putnam, III
W. Thomas Stephens
Richard B. Worley

Officers
George Putnam, III
President

Charles E. Porter
Executive Vice President,
Associate Treasurer and
Principal Executive Officer

Jonathan S. Horwitz
Senior Vice President
and Treasurer

Steven D. Krichmar
Vice President and
Principal Financial Officer

Michael T. Healy
Assistant Treasurer and
Principal Accounting Officer

Daniel T. Gallagher
Senior Vice President,
Staff Counsel and
Compliance Liaison

Beth S. Mazor
Vice President

James P. Pappas
Vice President

Richard S. Robie, III
Vice President

Francis J. McNamara, III
Vice President and
Chief Legal Officer

Charles A. Ruys de Perez
Vice President and
Chief Compliance Officer

Mark C. Trenchard
Vice President and
BSA Compliance Officer

Judith Cohen
Vice President, Clerk and
Assistant Treasurer

Wanda M. McManus
Vice President, Senior Associate
Treasurer and Assistant Clerk

Nancy E. Florek
Vice President, Assistant Clerk,
Assistant Treasurer
and Proxy Manager

This report is for the information of shareholders of Putnam RetirementReady Funds. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit www.putnam.com. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.


Item 2. Code of Ethics:

Not applicable

Item 3. Audit Committee Financial Expert:

Not applicable

Item 4. Principal Accountant Fees and Services:

Not applicable

Item 5. Audit Committee of Listed Registrants

Not applicable

Item 6. Schedule of Investments:

The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management
Investment Companies:

Not applicable

Item 8. Portfolio Managers of Closed-End Investment Companies

Not Applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and
Affiliated Purchasers:

Not applicable

Item 10. Submission of Matters to a Vote of Security Holders:

Not applicable

Item 11. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 12. Exhibits:

(a)(1) Not applicable

(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Putnam RetirementReady Funds

By (Signature and Title):

/s/Michael T. Healy
Michael T. Healy
Principal Accounting Officer

Date: March 29, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title):

/s/Charles E. Porter
Charles E. Porter
Principal Executive Officer

Date: March 29, 2006

By (Signature and Title):

/s/Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer

Date: March 29, 2006