August 28, 2023  

 

PROSPECTUS 

MFS® Lifetime® 2040 Fund

 

The investment objective of the fund is to seek a high level of total return consistent with its asset allocation until the approximate retirement year in the fund’s name; thereafter, the fund will seek total return through a combination of current income and capital appreciation. The asset allocation of the fund will change over time.

 

class   ticker
symbol
Class A   MLFAX
Class B   MLFBX
Class C   MLFCX
Class I   MLFIX
Class R1   MLFEX
Class R2   MLFGX
Class R3   MLFHX
Class R4   MLFJX
Class R6   MLFKX

 

 

Table of contents

 

SUMMARY OF KEY INFORMATION   2
INVESTMENT OBJECTIVE, STRATEGIES, AND RISKS   7
MANAGEMENT OF THE FUND   13
DESCRIPTION OF SHARE CLASSES   14
HOW TO PURCHASE, REDEEM, AND EXCHANGE SHARES   17
OTHER INFORMATION   22
FINANCIAL HIGHLIGHTS   25
APPENDIX A – WAIVERS AND REDUCTIONS OF SALES CHARGES   A-1
APPENDIX B – MENU AND DESCRIPTION OF UNDERLYING FUNDS   B-1

 

The Securities and Exchange Commission has not approved or disapproved the fund’s shares or determined whether this prospectus is accurate or complete. Anyone who tells you otherwise is committing a crime.

 

ML4-PRO-082823

 

 

 

 

MFS Lifetime 2040 Fund

 

Summary of Key Information

 

Investment Objective

 

The fund’s investment objective is to seek a high level of total return consistent with its asset allocation until the approximate retirement year in the fund’s name; thereafter, the fund will seek total return through a combination of current income and capital appreciation. The asset allocation of the fund will change over time.

 

Fees and Expenses

 

This table describes the fees and expenses that you may pay when you buy, hold, and sell shares of the fund. Investors may also pay commissions or other fees to their financial intermediaries when they buy, hold, and sell shares of the fund, which are not reflected below.

 

You may qualify for sales charge reductions if, with respect to Class A shares, you and certain members of your family invest, or agree to invest in the future, at least $50,000 in MFS funds. More information about these and other waivers and reductions is available from your financial intermediary and in “Sales Charges and Waivers and Reductions” on page 16 and “Appendix A – Waivers and Reductions of Sales Charges” on page A-1 of the fund’s prospectus.

 

Shareholder Fees (fees paid directly from your investment):

 

Share Class   A     B     C     I     R1     R2     R3     R4     R6  
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)     5.75 %     None       None       None       None       None       None       None       None  
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)     1.00 %#     4.00 %     1.00 %     None       None       None       None       None       None  
                                                                         
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):                    
                                                                         
Share Class   A     B     C     I     R1     R2     R3     R4     R6  
Management Fee     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %     0.00 %
Distribution and/or Service (12b-1) Fees     0.25 %     1.00 %     1.00 %     None       1.00 %     0.50 %     0.25 %     None       None  
Other Expenses     0.21 %     0.21 %     0.21 %     0.21 %     0.21 %     0.21 %     0.21 %     0.21 %     0.07 %
Acquired (Underlying) Fund Fees and Expenses     0.57 %     0.57 %     0.57 %     0.57 %     0.57 %     0.57 %     0.57 %     0.57 %     0.57 %
Total Annual Fund Operating Expenses     1.03 %     1.78 %     1.78 %     0.78 %     1.78 %     1.28 %     1.03 %     0.78 %     0.64 %
Fee Reductions, Expense Reimbursements and/or MFS Payments1     (0.21 )%     (0.21 )%     (0.21 )%     (0.21 )%     (0.21 )%     (0.21 )%     (0.21 )%     (0.21 )%     (0.21 )%
Total Annual Fund Operating Expenses After Fee Reductions, Expense Reimbursements and/or MFS Payments     0.82 %     1.57 %     1.57 %     0.57 %     1.57 %     1.07 %     0.82 %     0.57 %     0.43 %

 

 

# This contingent deferred sales charge (CDSC) applies to shares purchased without an initial sales charge and redeemed within 18 months of purchase.
1 Massachusetts Financial Services Company (MFS) has agreed in writing to bear the fund’s expenses, excluding management fees, distribution and service fees, interest, taxes, extraordinary expenses, brokerage and transaction costs, investment-related expenses, and fees and expenses associated with investments in investment companies and other similar investment vehicles, or make payment to the fund, such that “Other Expenses” do not exceed 0.00% of the class’ average daily net assets annually for each of Class A, Class B, Class C, Class I, Class R1, Class R2, Class R3, and Class R4 shares, and (0.14)% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue until at least August 31, 2024.

 

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MFS Lifetime 2040 Fund

 

Example

 

This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds.

 

The example assumes that: you invest $10,000 in the fund for the time periods indicated and you redeem your shares at the end of the time periods (unless otherwise indicated); your investment has a 5% return each year; and the fund’s operating expenses remain the same.

 

Although your actual costs will likely be higher or lower, under these assumptions your costs would be:

 

    1 YEAR     3 YEARS     5 YEARS     10 YEARS  
Class A Shares   $ 654     $ 864     $ 1,092     $ 1,744  
Class B Shares assuming1                                
redemption at end of period   $ 560     $ 840     $ 1,145     $ 1,879  
no redemption at end of period   $ 160     $ 540     $ 945     $ 1,879  
Class C Shares assuming1                                
redemption at end of period   $ 260     $ 540     $ 945     $ 1,879  
no redemption at end of period   $ 160     $ 540     $ 945     $ 1,879  
Class I Shares   $ 58     $ 228     $ 413     $ 946  
Class R1 Shares   $ 160     $ 540     $ 945     $ 2,077  
Class R2 Shares   $ 109     $ 385     $ 682     $ 1,527  
Class R3 Shares   $ 84     $ 307     $ 548     $ 1,240  
Class R4 Shares   $ 58     $ 228     $ 413     $ 946  
Class R6 Shares   $ 44     $ 184     $ 336     $ 778  

 

 

1 Shares automatically convert to Class A shares approximately eight years after purchase; therefore, the expense examples reflect Class A share expenses after eight years.

 

Portfolio Turnover

 

The fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when shares are held in a taxable account. These transaction costs, which are not reflected in “Annual Fund Operating Expenses” or in the “Example,” affect the fund’s performance. During the most recent fiscal year, the fund’s portfolio turnover rate was 18% of the average value of its portfolio.

 

Principal Investment Strategies

 

The fund is designed to provide diversification among different asset classes for investors with the approximate retirement year in the fund’s name. MFS (Massachusetts Financial Services Company, the fund’s investment adviser) invests substantially all of the fund’s assets in other MFS mutual funds, referred to as underlying funds.

 

MFS selects the asset class allocations based on a strategic asset allocation process that takes into account a variety of factors, including historical risk and performance, projected performance, and other factors. MFS’ analyses of projected performance are primarily based on quantitative models using various inputs such as valuation metrics, growth rates, profitability, yields, and inflation. MFS may also consider current market conditions, its qualitative assessment of the risk/return characteristics of asset classes, and other factors in determining these allocations.

 

MFS employs the strategic asset allocation process described above to determine the amount of the fund’s assets invested in (1) underlying funds that invest primarily in equity securities (“Equity Funds”) and underlying funds that provide exposure to less traditional asset classes, such as real estate and commodities (“Non-Traditional Funds”) and (2) underlying funds that invest primarily in debt instruments (“Bond Funds”) and an underlying fund that invests in cash and/or cash equivalents (“Money Market Fund”).

 

MFS selects the underlying funds within each asset class based on underlying fund classifications, historical risk, historical and projected performance of the represented asset classes, as well as other factors.

 

Within the Equity Fund allocation, MFS seeks to diversify by geography (by including domestic and international underlying funds), in terms of market capitalization (by including large, mid, and small capitalization underlying funds) and by style (by including both growth and value underlying funds). A portion of the fund’s assets is also allocated to Non-Traditional Funds (i.e., asset classes less correlated to the overall equity and debt markets), which MFS believes provides further diversification benefits.

 

Within the Bond Fund allocation, MFS includes underlying funds with varying degrees of geographic, interest rate and credit exposure, including exposure to below investment grade quality debt instruments. A portion of the fund’s assets may also be allocated to the Money Market Fund.

 

MFS normally invests the underlying funds’ assets across different industries, sectors, countries, and regions, but MFS may invest a significant percentage of the underlying funds’ assets in issuers in a single industry, sector, country, or region.

 

As of August 1, 2023, the fund’s approximate long-term strategic allocation among asset classes was:

 

Equity Funds and Non-Traditional Funds     83 %
Bond Funds and Money Market Fund     17 %

 

MFS may deviate from the long-term strategic allocations set forth above; however, any deviation from the long-term strategic allocation is not expected to be greater than plus or minus 10% under normal market conditions. Additionally, the fund’s allocation to Non-Traditional Funds will not typically exceed 20% of the fund’s assets.

 

As of August 1, 2023, the fund’s approximate strategic allocation among asset classes was:

 

Equity Funds and Non-Traditional Funds     83.2 %
U.S. Equity Funds     53.1 %
International Equity Funds     21.7 %
Non-Traditional Funds     8.4 %
Bond Funds and Money Market Fund     16.8 %
Bond Funds     16.8 %
Money Market Fund     0.0 %

 

All percentages are rounded to the nearest tenth of a percent. As a result, the sum of the asset class allocations presented in the table may not total 100%.

 

The asset class allocations for the fund, as well as the underlying funds and their weightings, are based on an allocation strategy designed for investors with the approximate retirement year in the fund’s name. Investors should also consider their age, personal circumstances, risk tolerance, and overall investment strategy and allocation. The asset allocation strategy will become increasingly conservative over time, shifting more weight from Equity Funds

 

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MFS Lifetime 2040 Fund

 

and Non-Traditional Funds to Bond Funds and the Money Market Fund.

 

Upon reaching its stated target year, the fund’s allocation strategy will be aligned with the allocation strategy of MFS Lifetime Income Fund. It is expected that the fund will be combined with MFS Lifetime Income Fund within five years of the date that its asset allocation strategy matches the asset allocation strategy of MFS Lifetime Income Fund. MFS Lifetime Income Fund is designed for investors who intend to withdraw assets over an extended period of time or who want an investment with an asset allocation mix similar to MFS Lifetime Income Fund’s long-term strategic asset allocation. The chart below illustrates how the asset allocation strategy of the fund will change over time.

 

 

 

Principal Risks

 

As with any mutual fund, the fund may not achieve its objective and/or you could lose money on your investment in the fund, including near or after the target year. There is no guarantee that the fund will provide income at or through retirement. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

 

The principal risks of investing in the fund are:

 

Allocation Risk: MFS’ assessment of the risk/return potential of asset classes and underlying funds, and the resulting allocation among asset classes and underlying funds, may not produce the intended results and/or can lead to an investment focus that results in the fund underperforming other funds with similar investment strategies and/or underperforming the markets in which the fund invests.

 

Underlying Funds Risk: MFS’ strategy of investing in underlying funds exposes the fund to the risks of the underlying funds. Each underlying fund pursues its own investment objective and strategies and may not achieve its objective. In addition, shareholders of the fund will indirectly bear the fees and expenses of the underlying funds.

 

Investment Selection Risk: MFS’ investment analysis, its development and use of quantitative models, and its selection of investments may not produce the intended results and/or can lead to an investment focus that results in the fund underperforming other funds with similar investment strategies and/or underperforming the markets in which the fund invests. The quantitative models used by MFS (both proprietary and third-party) may not produce the intended results for a variety of reasons, including the factors used in the models, the weight placed on each factor in the models, changes from the market factors’ historical trends, changing sources of market return or market risk, and technical issues in the design, development, implementation, application, and maintenance of the models (e.g., incomplete, stale, or inaccurate data, programming or other software issues, coding errors, and technology failures).

 

Equity Market Risk/Company Risk: Equity markets are volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These conditions can affect a single issuer or type of security, issuers within a broad market sector, industry or geographic region, or the equity markets in general. Certain events can have a dramatic adverse effect on equity markets and may lead to periods of high volatility in an equity market or a segment of an equity market. The value of an investment held by the fund may decline due to factors directly related to the issuer.

 

Growth Company Risk: The stocks of growth companies can be more sensitive to the company’s earnings and more volatile than the market in general.

 

Value Company Risk: The stocks of value companies can continue to be undervalued for long periods of time and not realize their expected value and can be more volatile than the market in general.

 

Intrinsic Value Strategy Risk: The stocks of companies that MFS believes are undervalued compared to their intrinsic value can continue to be undervalued for long periods of time, may not realize their expected value, and can be volatile.

 

Debt Market Risk: Debt markets can be volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These conditions can affect a single instrument, issuer, or borrower, a particular type of instrument, issuer, or borrower, a segment of the debt markets or the debt markets generally. Certain events can have a dramatic adverse effect on debt markets and may lead to periods of high volatility and reduced liquidity in a debt market or segment of a debt market.

 

Interest Rate Risk: In general, the price of a debt instrument falls when interest rates rise and rises when interest rates fall. Interest rate risk is generally greater for instruments with longer maturities or durations, or that do not pay current interest.

 

Credit Risk: The price of a debt instrument depends, in part, on the credit quality of the issuer, borrower, counterparty, or other entity responsible for payment, or underlying collateral or assets and the terms of the instrument. The price of a debt instrument can decline in response to changes in, or perceptions of, the financial condition of the issuer, borrower, counterparty, or other entity, or underlying collateral or assets, or changes in, or perceptions of, specific or general market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions.

 

Below investment grade quality debt instruments (commonly referred to as “high yield securities” or “junk bonds”) can involve a substantially greater risk of default or can already be in default, and their values can decline significantly. Below investment grade quality debt instruments are regarded as having predominantly speculative characteristics. Below investment grade quality debt instruments tend to be more sensitive to adverse news about the issuer, or the market or economy in general, than higher quality debt instruments.

 

Prepayment/Extension Risk: Instruments subject to prepayment and/or extension can reduce the potential for gain for the

 

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MFS Lifetime 2040 Fund

 

instrument’s holders if the instrument is prepaid and increase the potential for loss if the maturity of the instrument is extended.

 

Inflation-Adjusted Debt Instruments Risk: Interest payments on inflation-adjusted debt instruments can be unpredictable and vary based on the level of inflation. If inflation is negative, principal and income can both decline.

 

Focus Risk: Issuers in a single industry, sector, country, or region can react similarly to market, currency, political, economic, regulatory, geopolitical, environmental, public health, and other conditions, and the fund’s performance will be affected by the conditions in the industries, sectors, countries, and regions to which the fund is exposed.

 

Foreign Risk: Exposure to foreign markets through issuers or currencies can involve additional risks relating to market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These factors can make foreign investments, especially those tied economically to emerging markets or countries subject to sanctions or the threat of new or modified sanctions, more volatile and less liquid than U.S. investments. In addition, foreign markets can react differently to these conditions than the U.S. market.

 

Emerging Markets Risk: Investments tied economically to emerging markets, especially frontier markets, can involve additional and greater risks than the risks associated with investments in developed markets. Emerging markets can have less developed markets, greater custody and operational risk, less developed legal, regulatory, and accounting systems, greater government involvement in the economy, greater risk of new or inconsistent government treatment of or restrictions on issuers and instruments, and greater political, social, geopolitical, and economic instability than developed markets.

 

Currency Risk: The value of foreign currencies relative to the U.S. dollar fluctuates in response to market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions, and changes in currency exchange rates impact the financial condition of companies or other issuers and may change the value in U.S. dollars of investments denominated in foreign currencies.

 

Real Estate-Related Investment Risk: The risks of investing in real estate-related securities include certain risks associated with the direct ownership of real estate and the real estate industry in general. These include risks related to general, regional and local economic conditions; difficulties in valuing and disposing of real estate; fluctuations in interest rates and property tax rates; shifts in zoning laws, environmental regulations and other governmental action; cash flow dependency; increased operating expenses; lack of availability of mortgage funds; losses due to natural disasters; overbuilding; losses due to casualty or condemnation; changes in property values and rental rates; the management skill and creditworthiness of the real estate investment trust (REIT) manager; and other factors. The securities of smaller real estate-related issuers can be more volatile and less liquid than securities of larger issuers and their issuers can have more limited financial resources.

 

Commodity-Related Investments Risk: The value of commodity-related investments may be more volatile than the value of equity securities or debt instruments and may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, currency fluctuations, geopolitical events, or factors affecting a particular industry or commodity. The price of a commodity-related investment may be affected by demand/supply imbalances in the market for the commodity.

 

When-Issued, Delayed Delivery, and Forward Commitment Transaction Risk: The purchaser in a when-issued, delayed delivery or forward commitment transaction assumes the rights and risks of ownership, including the risks of price and yield fluctuations and the risk that the security will not be issued or delivered as anticipated. When-issued, delayed delivery, and forward commitment transactions can involve leverage.

 

Derivatives Risk: Derivatives can be highly volatile and involve risks in addition to the risks of the underlying indicator(s) on which the derivative is based. Gains or losses from derivatives can be substantially greater than the derivatives’ original cost. Derivatives can involve leverage.

 

Leveraging Risk: Leverage involves investment exposure in an amount exceeding the initial investment. Leverage can cause increased volatility by magnifying gains or losses.

 

Counterparty and Third Party Risk: Transactions involving a counterparty or third party other than the issuer of the instrument are subject to the credit risk of the counterparty or third party, and to the counterparty’s or third party’s ability or willingness to perform in accordance with the terms of the transaction.

 

Liquidity Risk: It may be difficult to value, and it may not be possible to sell, certain investments, types of investments, and/or investments in certain segments of the market, and the fund may have to sell certain of these investments at prices or times that are not advantageous in order to meet redemptions or other cash needs.

 

Large Shareholder Risk: From time to time, shareholders of the fund (which may include institutional investors, financial intermediaries, or other MFS funds) may make relatively large redemptions or purchases of fund shares. These transactions may cause the fund to sell securities or invest additional cash, as the case may be, at disadvantageous prices. Redemptions of a large number of shares also may increase transaction and other costs or have adverse tax consequences for shareholders of the fund by requiring a sale of portfolio securities. Purchases of a large number of shares may adversely affect the fund’s performance to the extent that it takes time to invest new cash and the fund maintains a larger cash position than it ordinarily would.

 

Performance Information

 

The bar chart and performance table below are intended to provide some indication of the risks of investing in the fund by showing changes in the fund’s performance over time and how the fund’s performance over time compares with that of a broad measure of market performance and one or more other measures of performance for markets in which the fund may invest.

 

The fund’s past performance (before and after taxes) does not necessarily indicate how the fund will perform in the future. Updated performance is available online at mfs.com or by calling 1-800-225-2606.

 

Class A Bar Chart. The bar chart does not take into account any sales charges (loads) that you may be required to pay upon purchase or redemption of the fund’s shares. If these sales charges were included, they would reduce the returns shown.

 

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MFS Lifetime 2040 Fund

 

 

The total return for the six-month period ended June 30, 2023, was 9.01%. During the period(s) shown in the bar chart, the highest quarterly return was 17.23% (for the calendar quarter ended June 30, 2020) and the lowest quarterly return was (20.14)% (for the calendar quarter ended March 31, 2020).

 

Performance Table.

 

Average Annual Total Returns            
(For the Periods Ended December 31, 2022)            

 

Share Class   1 YEAR     5 YEARS     10 YEARS  
Returns Before Taxes                        
B Shares     (19.31 )%     4.47 %     7.62 %
C Shares     (16.89 )%     4.81 %     7.62 %
I Shares     (15.27 )%     5.85 %     8.51 %
R1 Shares     (16.12 )%     4.79 %     7.46 %
R2 Shares     (15.67 )%     5.33 %     8.00 %
R3 Shares     (15.49 )%     5.59 %     8.27 %
R4 Shares     (15.23 )%     5.86 %     8.55 %
R6 Shares     (15.13 )%     6.00 %     8.64 %
A Shares     (20.34 )%     4.35 %     7.64 %
Returns After Taxes on Distributions                        
A Shares     (21.69 )%     2.68 %     6.31 %
Returns After Taxes on Distributions and Sale of Fund Shares                        
A Shares     (11.45 )%     3.05 %     5.85 %
Index Comparisons (Reflects no deduction for fees, expenses, or taxes)                        
Standard & Poor’s 500 Stock Index     (18.11 )%     9.42 %     12.56 %
MFS Lifetime 2040 Fund Blended Index     (15.31 )%     5.93 %     8.47 %

 

As of December 31, 2022, the MFS Lifetime 2040 Fund Blended Index (the Blended Index) consisted of the following indices and weightings: 53.42% Standard & Poor’s 500 Stock Index; 22.27% MSCI EAFE Index (net div); 15.75% Bloomberg U.S. Aggregate Bond Index; 4.28% Bloomberg Commodity Index; and 4.28% FTSE EPRA Nareit Developed Real Estate Index (net div). The components and weightings of the Blended Index may have differed during the periods and may differ in the future. The weightings of the Blended Index are designed to change systematically on a preset schedule and will differ over time.

 

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your own tax situation, and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their shares through tax-advantaged arrangements, such as 401(k) plans or individual retirement accounts. The after-tax returns are shown for only one of the fund’s classes of shares, and after-tax returns for the fund’s other classes of shares will vary from the returns shown.

 

Investment Adviser

 

MFS serves as the investment adviser for the fund.

 

Portfolio Manager(s)

 

Portfolio Manager   Since   Title
Joseph Flaherty, Jr.   2005   Chief Investment Risk Officer of MFS
Benjamin Nastou   August 2023   Investment Officer of MFS
Natalie Shapiro   2018   Investment Officer of MFS
Erich Shigley   August 2023   Investment Officer of MFS

 

Purchase and Sale of Fund Shares

 

You may purchase and redeem shares of the fund each day the New York Stock Exchange (the NYSE) is open for trading. You may purchase or redeem shares either by having your financial intermediary process your purchase or redemption, or through MFS Service Center, Inc. (MFSC) by overnight mail (MFSC, Suite 219341, 430 W 7th Street, Kansas City, MO 64105-1407), by mail ([Fund Name], P.O. Box 219341, Kansas City, MO 64121-9341), by telephone (1-800-225-2606), or via the Internet at mfs.com (MFS Access).

 

The fund’s initial and subsequent investment minimums generally are as follows:

 

Class    Initial Minimum     Subsequent Minimum
Class A, Class B, Class C  

None – automatic investment plans and certain asset-based fee programs

$25 – employer-sponsored retirement plans

$250 – Traditional and Roth IRAs

$1,000 – other accounts

 

$50 – by check and non-systematic written exchange request, and via MFSC telephone representatives

None – other purchases

Class I, Class R1, Class R2, Class R3, Class R4, Class R6   None   None

 

Purchases of Class B shares are closed to new and existing investors except through reinvestment of dividends and capital gain distributions. Existing investors may continue to exchange their Class B shares for the same share class of another MFS fund.

 

Effective after the close of business on September 29, 2023, purchases of Class R1 and Class R2 shares are closed to new eligible investors. After the close of business on September 29, 2023, existing eligible investors can make additional purchases and reinvest distributions in Class R1 and Class R2 shares in any account open as of the close of business on September 29, 2023. Existing eligible investors, after the close of business on September 29, 2023, may also exchange their Class R1 and Class R2 shares for the same share class of another MFS fund, open new Class R1 and Class R2 share accounts in other MFS funds, and transfer some or

 

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MFS Lifetime 2040 Fund

 

all of the shares in their account to another account and such account will be treated as having been open as of the close of business on September 29, 2023. Subject to the approval of the fund’s Board of Trustees, the fund may in the future (i) close purchases of Class R1 and/or Class R2 shares to existing eligible investors; (ii) terminate and liquidate Class R1 and/or Class R2 shares; or (iii) convert Class R1 and/or Class R2 shares to another share class of the fund. Such actions may be undertaken without shareholder approval, but the fund expects to provide shareholders with at least 60 days’ notice before taking any such action.

 

Taxes

 

If your shares are held in a taxable account, the fund’s distributions will be taxed to you as ordinary income and/or capital gains. If your shares are held in a tax-advantaged account, you will generally be taxed only upon withdrawals from the account.

 

Payments to Broker/Dealers and Other Financial Intermediaries

 

If you purchase shares of the fund through a broker/dealer or other financial intermediary (such as a bank), the fund, MFS, and/or MFS’ affiliates may pay the financial intermediary for the sale of shares of the fund and/or the servicing of shareholder accounts. These payments may create a conflict of interest by influencing your broker/dealer or other financial intermediary and your salesperson to recommend the fund over another investment. Ask your financial intermediary or visit your financial intermediary’s website for more information.

 

Investment Objective, Strategies, and Risks

 

Investment Objective

 

The fund’s investment objective is to seek a high level of total return consistent with its asset allocation until the approximate retirement year in the fund’s name; thereafter, the fund will seek total return through a combination of current income and capital appreciation. The asset allocation of the fund will change over time. The fund’s objective may be changed without shareholder approval.

 

Principal Investment Strategies

 

The fund is designed to provide diversification among different asset classes for investors with the approximate retirement year in the fund’s name. MFS invests substantially all of the fund’s assets in other MFS mutual funds, referred to as underlying funds.

 

MFS selects the asset class allocations based on a strategic asset allocation process that takes into account a variety of factors, including historical risk and performance, projected performance, and other factors. MFS’ analyses of projected performance are primarily based on quantitative models using various inputs such as valuation metrics, growth rates, profitability, yields, and inflation. MFS may also consider current market conditions, its qualitative assessment of the risk/return characteristics of asset classes, and other factors in determining these allocations.

 

MFS employs the strategic asset allocation process described above to determine the amount of the fund’s assets invested in (1) underlying funds that invest primarily in equity securities (“Equity Funds”) and underlying funds that provide exposure to less traditional asset classes, such as real estate and commodities (“Non-Traditional Funds”) and (2) underlying funds that invest primarily in debt instruments (“Bond Funds”) and an underlying fund that invests in cash and/or cash equivalents (“Money Market Fund”). The asset class allocations provide an initial layer of diversification for the fund.

 

As of August 1, 2023, the fund’s approximate long-term strategic allocation among asset classes was:

 

Equity Funds and Non-Traditional Funds     83 %
Bond Funds and Money Market Fund     17 %

 

MFS may deviate from the long-term strategic allocations set forth above; however, any deviation from the long-term strategic allocation is not expected to be greater than plus or minus 10% under normal market conditions. Additionally, the fund’s allocation to Non-Traditional Funds will not typically exceed 20% of the fund’s assets.

 

As of August 1, 2023, the fund’s approximate strategic allocation among asset classes was:

 

Equity Funds and Non-Traditional Funds     83.2 %
U.S. Equity Funds     53.1 %
International Equity Funds     21.7 %
Non-Traditional Funds     8.4 %
Bond Funds and Money Market Fund     16.8 %
Bond Funds     16.8 %
Money Market Fund     0.0 %

 

All percentages are rounded to the nearest tenth of a percent. As a result, the sum of the asset class allocations presented in the table may not total 100%.

 

MFS selects the underlying funds within each asset class based on underlying fund classifications, historical risk, historical and projected performance of the represented asset classes, as well as other factors. The selection process provides a second layer of diversification within the asset class allocations.

 

Within the Equity Fund allocation, MFS seeks to diversify by geography (by including domestic and international underlying funds), in terms of market capitalization (by including large, mid, and small capitalization underlying funds) and by style (by including both growth and value underlying funds). A portion of the fund’s assets is also allocated to Non-Traditional Funds (i.e., asset classes less correlated to the overall equity and debt markets), which MFS believes provides further diversification benefits.

 

Within the Bond Fund allocation, MFS includes underlying funds with varying degrees of geographic, interest rate and credit exposure, including exposure to below investment grade quality debt instruments. A portion of the fund’s assets may also be allocated to the Money Market Fund.

 

MFS normally invests the underlying funds’ assets across different industries, sectors, countries, and regions, but MFS may invest a significant percentage of the underlying funds’ assets in issuers in a single industry, sector, country, or region.

 

The asset class allocations for the fund, as well as the underlying funds and their weightings, are based on an allocation strategy designed for investors with the approximate retirement year in the fund’s name. An investor should consider the year during which the investor expects to start drawing assets for retirement, which may or may not be the year in which the investor expects to retire. In addition, an investor should consider a number of other factors including the investor’s age, how the fund will fit into an overall investment strategy and allocation, and whether the investor is looking for a more aggressive or more conservative allocation.

 

The asset allocation strategy for the fund will become increasingly conservative over time, shifting more weight from Equity Funds

 

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and Non-Traditional Funds to Bond Funds and the Money Market Fund. As a result, the fund’s allocation strategy will gradually become more aligned with the long-term strategic allocation strategy of MFS Lifetime Income Fund (approximate allocation of 71% in Bond Funds and the Money Market Fund and an approximate allocation of 29% in Equity Funds and Non-Traditional Funds as of August 1, 2023). MFS Lifetime Income Fund is designed for investors who intend to withdraw assets over an extended period of time or who want an investment with an asset allocation mix similar to MFS Lifetime Income Fund’s long-term strategic asset allocation. Upon reaching its stated target year, a fund’s allocation strategy will be aligned with the allocation strategy of MFS Lifetime Income Fund. It is expected that the Board of Trustees will combine, without a shareholder vote, the fund with MFS Lifetime Income Fund within five years of the date that the fund’s asset allocation strategy matches the asset allocation strategy of MFS Lifetime Income Fund. The chart below illustrates how the asset allocation strategy of the fund will change over time:

 

 

Following is the list of underlying funds and their approximate strategic allocation weightings as of August 1, 2023:

 

Equity Funds and Non-Traditional Funds     83.2 %
U.S. Equity Funds:     53.1 %
MFS Blended Research Core Equity Fund     5.0 %
MFS Blended Research Growth Equity Fund     5.1 %
MFS Blended Research Mid Cap Equity Fund     9.2 %
MFS Blended Research Small Cap Equity Fund     2.1 %
MFS Blended Research Value Equity Fund     5.1 %
MFS Growth Fund     5.1 %
MFS Mid Cap Growth Fund     4.6 %
MFS Mid Cap Value Fund     4.6 %
MFS New Discovery Fund     1.1 %
MFS New Discovery Value Fund     1.1 %
MFS Research Fund     5.0 %
MFS Value Fund     5.1 %
International Equity Funds:     21.7 %
MFS Blended Research Emerging Markets Equity Fund     0.6 %
MFS Blended Research International Equity Fund     9.0 %
MFS Emerging Markets Equity Fund     0.6 %
MFS International Growth Fund     2.7 %
MFS International Intrinsic Value Fund     2.7 %
MFS International New Discovery Fund     2.4 %
MFS Research International Fund     3.6 %
Non-Traditional Funds:     8.4 %
MFS Commodity Strategy Fund     4.2 %
MFS Global Real Estate Fund     4.2 %
Bond Funds and Money Market Fund     16.8 %
Bond Funds:     16.8 %
MFS Emerging Markets Debt Fund     2.4 %
MFS Emerging Markets Debt Local Currency Fund     1.6 %
MFS Global Opportunistic Bond Fund     2.4 %
MFS High Income Fund     3.1 %
MFS Inflation-Adjusted Bond Fund     4.5 %
MFS Total Return Bond Fund     2.9 %
Money Market Fund:     0.0 %
MFS Institutional Money Market Portfolio     0.0 %

 

All percentages are rounded to the nearest tenth of a percent. As a result, the sum of the underlying fund allocations in each asset class may not equal the asset class allocations for such asset class, and the asset class and underlying fund allocations presented in the table may not total 100%.

 

MFS may allocate the fund’s assets among any number of the underlying funds listed in Appendix B of this prospectus at any time. A description of the underlying funds is also set forth in Appendix B of this prospectus. The fund’s underlying fund allocations may vary significantly over time, and the fund may be invested in some but not all of the underlying funds in Appendix B at any time.

 

Although the underlying funds listed in Appendix B are categorized generally as Equity Funds (U.S. or International), Non-Traditional Funds, Bond Funds or Money Market Fund, many of the underlying funds can invest in a mix of securities (e.g., a U.S. Equity Fund can invest in international stocks, or a Non-Traditional Fund can invest in stocks and/or bonds).

 

The asset class allocations and the underlying funds and their weightings are not designed to take advantage of short-term market opportunities and have been selected for investment over longer time periods. The asset class allocations and the underlying funds and their weightings may be changed without shareholder approval or notice. The actual weightings can also deviate due to market movements and cash flows. MFS systematically rebalances the

 

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MFS Lifetime 2040 Fund

 

fund’s investments in the underlying funds to reflect the fund’s current strategic allocations.

 

Principal Investment Types of the Underlying Funds

 

The principal investment types in which the underlying funds may invest include:

 

Equity Securities: Equity securities represent an ownership interest, or the right to acquire an ownership interest, in a company or other issuer. Different types of equity securities provide different voting and dividend rights and priorities in the event of bankruptcy of the issuer. Equity securities include common stocks, preferred stocks, securities convertible into stocks, equity interests in REITs, and depositary receipts for such securities.

 

Debt Instruments: Debt instruments represent obligations of corporations, governments, and other entities to repay money borrowed, or other instruments believed to have debt-like characteristics. The issuer or borrower usually pays a fixed, variable, or floating rate of interest, and must repay the amount borrowed, usually at the maturity of the instrument. Debt instruments generally trade in the over-the-counter market and can be less liquid than other types of investments, particularly during adverse market and economic conditions. During certain market conditions, debt instruments in some or many segments of the debt market can trade at a negative interest rate (i.e., the price to purchase the debt instrument is more than the present value of expected interest payments and principal due at the maturity of the instrument). Some debt instruments, such as zero coupon bonds or payment-in-kind bonds, do not pay current interest. Other debt instruments, such as certain mortgage-backed securities and other securitized instruments, make periodic payments of interest and/or principal. Some debt instruments are partially or fully secured by collateral supporting the payment of interest and principal.

 

Corporate Bonds: Corporate bonds are debt instruments issued by corporations or similar entities.

 

U.S. Government Securities: U.S. Government securities are securities issued or guaranteed as to the payment of principal and interest by the U.S. Treasury, by an agency or instrumentality of the U.S. Government, or by a U.S. Government-sponsored entity. Certain U.S. Government securities are not supported as to the payment of principal and interest by the full faith and credit of the U.S. Treasury or the ability to borrow from the U.S. Treasury. Some U.S. Government securities are supported as to the payment of principal and interest only by the credit of the entity issuing or guaranteeing the security. U.S. Government securities include mortgage-backed securities and other types of securitized instruments guaranteed by the U.S. Treasury, by an agency or instrumentality of the U.S. Government, or by a U.S. Government-sponsored entity.

 

Foreign Government Securities: Foreign government securities are debt instruments issued, guaranteed, or supported, as to the payment of principal and interest, by foreign governments, foreign government agencies, foreign semi-governmental entities or supranational entities, or debt instruments issued by entities organized and operated for the purpose of restructuring outstanding foreign government securities. Foreign government securities may not be supported as to the payment of principal and interest by the full faith and credit of the foreign government.

 

Securitized Instruments: Securitized instruments are debt instruments that generally provide payments of principal and interest based on the terms of the instrument and cash flows generated by the underlying assets. Underlying assets include residential and commercial mortgages, debt instruments, loans, leases, and receivables. Securitized instruments are issued by trusts or other special purpose entities that hold the underlying assets. Certain securitized instruments offer multiple classes that differ in terms of their priority to receive principal and/or interest payments under the terms of the instrument. Securitized instruments include mortgage-backed securities, collateralized debt obligations, and other asset-backed securities. Certain mortgage-backed securities are issued on a delayed delivery or forward commitment basis where payment and delivery take place at a future date.

 

When-Issued, Delayed Delivery, and Forward Commitment Transactions: When-issued, delayed delivery, and forward commitment transactions, including securities purchased or sold in the to be announced (TBA) market, involve a commitment to purchase or sell a security at a predetermined price or yield at which payment and delivery take place after the customary settlement period for that type of security. Typically, no interest accrues to the purchaser until the security is delivered. When purchasing or selling securities pursuant to one of these transactions, payment for the securities is not required until the delivery date. In the TBA market, mortgage-backed securities are purchased and sold at predetermined prices on a delayed delivery or forward commitment basis with the underlying securities to be announced at a future date.

 

Inflation-Adjusted Debt Instruments: Inflation-adjusted debt instruments are debt instruments whose principal and/or interest are adjusted for inflation. Inflation-adjusted debt instruments issued by the U.S. Treasury pay a fixed rate of interest that is applied to an inflation-adjusted principal amount. The principal amount is adjusted based on changes in the Consumer Price Index. The principal due at maturity is typically equal to the inflation-adjusted principal amount, or to the instrument’s original par value, whichever is greater. Other types of inflation-adjusted debt instruments may use other methods of adjusting for inflation, and other measures of inflation. Other issuers of inflation-adjusted debt instruments include U.S. Government agencies, instrumentalities and sponsored entities, U.S. and foreign corporations, and foreign governments.

 

Real Estate-Related Investments: Real estate-related investments include REITs, issuers similar to REITs formed under the laws of non-U.S. countries, and other U.S. and foreign issuers that earn at least 50% of their gross revenues or net profits from real estate activities or from products or services related to the real estate sector. Real estate activities include owning, developing, managing, or acting as a broker for real estate. Examples of real estate products or services include building supplies and mortgage servicing. REITs are pooled investment vehicles that invest primarily in income-producing real estate or real estate-related loans or interests. Equity REITs invest most of their assets directly in U.S. or foreign real property, receive most of their income from rents and may also realize gains by selling appreciated property. Mortgage REITs invest most of their assets in real estate mortgages and receive most of their income from interest payments. Hybrid REITs combine the characteristics of both equity REITs and mortgage REITs.

 

Commodity-Linked Derivatives: Commodity-linked derivatives are derivatives whose value is based on the value of a commodity, a commodity futures or option contract, a commodity index, or some other indicator that reflects the value of a particular commodity or commodity market or the difference between one or more commodities or commodity markets (“commodity indicator”). Commodity-linked derivatives include futures, options, and swaps.

 

Derivatives: Derivatives are financial contracts whose value is based on the value of one or more underlying indicators or the difference between underlying indicators. Underlying indicators may include a security or other financial instrument, asset, currency, interest rate, credit rating, commodity, volatility measure, or index. Derivatives often involve a counterparty to the transaction.

 

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MFS Lifetime 2040 Fund

 

Derivatives include futures, forward contracts, options, swaps, and certain complex structured securities.

 

Principal Risks

 

The yield and share price of the fund will change daily based on the performance of the underlying funds. Underlying fund performance will change daily based on changes in interest rates and market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. As with any mutual fund, the fund may not achieve its objective and/or you could lose money on your investment in the fund, including near or after the target year. There is no guarantee that the fund will provide income at or through retirement. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The significance of any specific risk to an investment in the fund will vary over time depending on the composition of the fund’s portfolio, market conditions, and other factors. You should read all of the risk information below carefully, because any one or more of these risks may result in losses to the fund.

 

The principal risks of investing in the fund are:

 

Allocation Risk: MFS’ assessment of the risk/return potential of asset classes and underlying funds, and the resulting allocation among asset classes and underlying funds, may not produce the intended results and/or can lead to an investment focus that results in the fund underperforming other funds with similar investment strategies and/or underperforming the markets in which the fund invests.

 

Underlying Funds Risk: MFS’ strategy of investing in underlying funds exposes the fund to the risks of the underlying funds. Each underlying fund pursues its own investment objective and strategies and may not achieve its objective. In addition, shareholders of the fund will indirectly bear the fees and expenses of the underlying funds.

 

Investment Selection Risk: MFS’ investment analysis, its development and use of quantitative models, and its selection of investments may not produce the intended results and/or can lead to an investment focus that results in the fund underperforming other funds with similar investment strategies and/or underperforming the markets in which the fund invests. The quantitative models used by MFS (both proprietary and third-party) may not produce the intended results for a variety of reasons, including the factors used in the models, the weight placed on each factor in the models, changes from the market factors’ historical trends, changing sources of market return or market risk, and technical issues in the design, development, implementation, application, and maintenance of the models (e.g., incomplete, stale, or inaccurate data, programming or other software issues, coding errors, and technology failures). In addition, MFS or the fund’s other service providers may experience disruptions or operating errors that could negatively impact the fund.

 

Equity Market Risk: Equity markets can be volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These conditions can affect a single issuer or type of security, issuers within a broad market sector, industry or geographic region, or the equity markets in general. Different parts of the market and different types of securities can react differently to these conditions. For example, the stocks of growth companies can react differently from the stocks of value companies, and the stocks of large cap companies can react differently from the stocks of small cap companies. Certain changes or events, such as political, social, or economic developments, including increasing or negative interest rates or the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan (which has in the past resulted and may in the future result in a government shutdown); market closures and/or trading halts; government or regulatory actions, including sanctions, the imposition of tariffs or other protectionist actions and changes in fiscal, monetary, or tax policies; natural disasters; outbreaks of pandemic and epidemic diseases; terrorist attacks; war; and other geopolitical changes or events, can have a dramatic adverse effect on equity markets and may lead to periods of high volatility in an equity market or a segment of an equity market.

 

Company Risk: Changes in the financial condition of a company or other issuer, changes in specific market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions that affect a particular type of investment or issuer, and changes in general market, economic, political, regulatory, geopolitical, environmental, public health, and other conditions can adversely affect the prices of investments. The value of an investment held by the fund may decline due to factors directly related to the issuer, such as competitive pressures, cybersecurity incidents, financial leverage, historical and/or prospective earnings, management performance, labor and supply shortages, investor perceptions, and other factors. The prices of securities of smaller, less well-known issuers can be more volatile than the prices of securities of larger issuers or the market in general.

 

Growth Company Risk: The stocks of growth companies can be more sensitive to the company’s earnings and more volatile than the market in general.

 

Value Company Risk: The stocks of value companies can continue to be undervalued for long periods of time and not realize their expected value and can be more volatile than the market in general.

 

Intrinsic Value Strategy Risk: The stocks of companies that MFS believes are undervalued compared to their intrinsic value can continue to be undervalued for long periods of time, may not realize their expected value, and can be volatile.

 

Debt Market Risk: Debt markets can be volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. These conditions can affect a single instrument, issuer, or borrower, a particular type of instrument, issuer, or borrower, a segment of the debt markets, or debt markets generally. Certain changes or events, such as political, social, or economic developments, including increasing and negative interest rates or the U.S. government’s inability at times to agree on a long-term budget and deficit reduction plan (which has in the past resulted and may in the future result in a government shutdown); market closures and/or trading halts; government or regulatory actions, including the imposition of tariffs or other protectionist actions and changes in fiscal, monetary, or tax policies; natural disasters; outbreaks of pandemic and epidemic diseases; terrorist attacks; war; and other geopolitical changes or events can have a dramatic adverse effect on debt markets and may lead to periods of high volatility and reduced liquidity in a debt market or a segment of a debt market.

 

Interest Rate Risk: The price of a debt instrument typically changes in response to interest rate changes. Interest rates can change in response to the supply and demand for credit, government and/or central bank monetary policy and action, inflation rates, and other factors. In general, the price of a debt instrument falls when interest rates rise and rises when interest rates fall. Inflationary price movements may cause fixed income securities markets to experience heightened levels of interest rate volatility and liquidity risk. The risks associated with rising interest rates may be

 

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MFS Lifetime 2040 Fund

 

particularly acute in the current market environment because the Federal Reserve Board recently raised interest rates and may continue to do so. Interest rate risk is generally greater for fixed-rate instruments than floating-rate instruments and for instruments with longer maturities or durations, or that do not pay current interest. In addition, short-term and long-term interest rates, and interest rates in different countries, do not necessarily move in the same direction or by the same amount. An instrument’s reaction to interest rate changes depends on the timing of its interest and principal payments and the current interest rate for each of those time periods. The price of an instrument trading at a negative interest rate responds to interest rate changes like other debt instruments; however, an instrument purchased at a negative interest rate is expected to produce a negative return if held to maturity. Changes in government and/or central bank monetary policy may affect the level of interest rates. Fluctuations in the market price of fixed-rate instruments held by the fund may not affect interest income derived from those instruments, but may nonetheless affect the fund’s share price, especially if an instrument has a longer maturity or duration and is therefore more sensitive to changes in interest rates.

 

Inflation-adjusted debt instruments tend to react to changes in “real” interest rates. “Real” interest rates represent nominal interest rates reduced by the inflation rate.

 

Credit Risk: The price of a debt instrument depends, in part, on the issuer’s or borrower’s credit quality or ability to pay principal and interest when due. The price of a debt instrument is likely to fall if an issuer or borrower defaults on its obligation to pay principal or interest, if the instrument’s credit rating is downgraded by a credit rating agency, or based on other changes in, or perceptions of, the financial condition of the issuer or borrower. For certain types of instruments, including derivatives, the price of the instrument depends in part on the credit quality of the counterparty to the transaction. For other types of debt instruments, including securitized instruments, the price of the debt instrument also depends on the credit quality and adequacy of the underlying assets or collateral as well as whether there is a security interest in the underlying assets or collateral. Enforcing rights, if any, against the underlying assets or collateral may be difficult.

 

Below investment grade quality debt instruments can involve a substantially greater risk of default or can already be in default, and their values can decline significantly over short periods of time. Below investment grade quality debt instruments are regarded as having predominantly speculative characteristics with respect to capacity to pay interest and principal. Below investment grade quality debt instruments tend to be more sensitive to adverse news about the issuer, or the market or economy in general, than higher quality debt instruments. The market for below investment grade quality debt instruments can be less liquid, especially during periods of recession or general market decline.

 

Prepayment/Extension Risk: Many types of debt instruments, including mortgage-backed securities, securitized instruments, certain corporate bonds, and municipal housing bonds, and certain derivatives, are subject to the risk of prepayment and/or extension. Prepayment occurs when unscheduled payments of principal are made or the instrument is called or redeemed prior to an instrument’s maturity. When interest rates decline, the instrument is called, or for other reasons, these debt instruments may be repaid more quickly than expected. As a result, the holder of the debt instrument may not be able to reinvest the proceeds at the same interest rate or on the same terms, reducing the potential for gain. When interest rates increase or for other reasons, these debt instruments may be repaid more slowly than expected, increasing the potential for loss. In addition, prepayment rates are difficult to predict and the potential impact of prepayment on the price of a debt instrument depends on the terms of the instrument.

 

Inflation-Adjusted Debt Instruments Risk: Interest payments on inflation-adjusted debt instruments can be unpredictable and vary based on the level of inflation. If inflation is negative, principal and income both can decline. In addition, the measure of inflation used may not correspond to the actual rate of inflation experienced by a particular individual.

 

Focus Risk: Issuers in a single industry, sector, country, or region can react similarly to market, currency, political, economic, regulatory, geopolitical, environmental, public health, and other conditions. These conditions include business environment changes; economic factors such as fiscal, monetary, and tax policies; inflation and unemployment rates; and government and regulatory changes. The fund’s performance will be affected by the conditions in the industries, sectors, countries, and regions to which the fund is exposed.

 

Foreign Risk: Investments in securities of foreign issuers, securities of companies with significant foreign exposure, and foreign currencies can involve additional risks relating to market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions. Political, social, diplomatic, and economic developments, U.S. and foreign government action, or the threat thereof, such as the imposition of currency or capital blockages, controls, or tariffs, economic and trade sanctions or embargoes, security trading suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization of assets in a particular country, can cause dramatic declines in certain or all securities with exposure to that country and other countries. Sanctions, or the threat of sanctions, may cause volatility in regional and global markets and may negatively impact the performance of various sectors and industries, as well as companies in other countries, which could have a negative effect on the performance of the fund. In the event of nationalization, expropriation, confiscation or other government action, intervention, or restriction, the fund could lose its entire investment in a particular foreign issuer or country. Civil unrest, geopolitical tensions, wars, and acts of terrorism are other potential risks that could adversely affect an investment in a foreign security or in foreign markets or issuers generally. Economies and financial markets are interconnected, which increases the likelihood that conditions in one country or region can adversely impact issuers in different countries and regions. Less stringent regulatory, accounting, auditing, and disclosure requirements for issuers and markets are more common in certain foreign countries. Enforcing legal rights can be difficult, costly, and slow in certain foreign countries and with respect to certain types of investments, and can be particularly difficult against foreign governments. Changes in currency exchange rates can significantly impact the financial condition of a company or other issuer with exposure to multiple countries as well as affect the U.S. dollar value of foreign currency investments and investments denominated in foreign currencies. Additional risks of foreign investments include trading, settlement, custodial, and other operational risks, and withholding and other taxes. These factors can make foreign investments, especially those tied economically to emerging markets, more volatile and less liquid than U.S. investments. In addition, foreign markets can react differently to market, economic, industry, political, regulatory, geopolitical, environmental, public health, and other conditions than the U.S. market.

 

Emerging Markets Risk: Investments tied economically to emerging markets, especially frontier markets (emerging markets that are early in their development), can involve additional and greater risks than the risks associated with investments in developed

 

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MFS Lifetime 2040 Fund

 

markets. Emerging markets typically have less developed economies and markets, greater custody and operational risk, less developed legal, regulatory, and accounting systems, less trading volume, less stringent investor protection and disclosure standards, less reliable settlement practices, greater government involvement in the economy, and greater risk of new or inconsistent government treatment of or restrictions on issuers and instruments than developed countries. Financial and other disclosures by emerging market issuers may be considerably less reliable than disclosures made by issuers in developed markets. In addition, the Public Company Accounting Oversight Board, which regulates auditors of U.S. public companies, may not be able to inspect audit work papers in certain emerging market countries. Emerging markets can also be subject to greater political, social, geopolitical, and economic instability and more susceptible to environmental problems. In addition, many emerging market countries with less established health care systems have experienced outbreaks of pandemics or contagious diseases from time to time. These factors can make emerging market investments more volatile and less liquid than investments in developed markets.

 

Currency Risk: Changes in currency exchange rates can significantly impact the financial condition of a company or other issuer with exposure to multiple countries. In addition, a decline in the value of a foreign currency relative to the U.S. dollar reduces the value of the foreign currency and investments denominated in that currency. In addition, the use of foreign exchange contracts to reduce foreign currency exposure can eliminate some or all of the benefit of an increase in the value of a foreign currency versus the U.S. dollar. The value of foreign currencies relative to the U.S. dollar fluctuates in response to, among other factors, interest rate changes, intervention (or failure to intervene) by the U.S. or foreign governments, central banks, or supranational entities such as the International Monetary Fund, the imposition of currency controls, and other political or regulatory conditions in the United States or abroad. Foreign currency values can decrease significantly both in the short term and over the long term in response to these and other conditions.

 

Real Estate-Related Investment Risk: The risks of investing in real estate-related investments include certain risks associated with the direct ownership of real estate and the real estate industry in general. Real estate-related investments are affected by general, regional and local economic conditions; difficulties in valuing and disposing of real estate; and fluctuations in interest rates and property tax rates; shifts in zoning laws, environmental regulations, and other governmental action; cash flow dependency; increased operating expenses; lack of availability of mortgage funds; losses due to natural disasters; overbuilding; losses due to casualty or condemnation; changes in property values and rental rates; the management skill and creditworthiness of the REIT manager; and other factors. The real estate sector is particularly sensitive to economic downturns. Equity REITs may be affected by changes in the value of the underlying property owned by the trusts. Mortgage REITs may be affected by default or payment problems relating to underlying mortgages, the quality of credit extended and prepayments of the underlying mortgages. Equity and mortgage REITs could be adversely affected by failure to qualify for the favorable tax treatment available to REITs under the Internal Revenue Code of 1986, as amended, or to maintain their exemption from registration under the Investment Company Act of 1940, as amended. The securities of small real estate-related issuers can be more volatile and less liquid than securities of larger issuers and their issuers can have more limited financial resources. In addition, REITs may have limited diversification because they invest in a limited number of properties, a narrow geographic area, or a single type of property.

 

Commodity-Related Investments Risk: The value of commodity-related investments may be more volatile than the value of equity securities or debt instruments and may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, currency fluctuations, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, geopolitical events, embargoes, tariffs and international economic, political and regulatory developments. The price of a commodity-related investment may be affected by demand/supply imbalances in the market for the commodity or by demand/supply disruptions in major producing regions and changes in transportation, handling, and storage costs. Certain commodities may be produced in a limited number of states or countries and may be controlled by a small number of producers or groups of producers. As a result, political, economic, and supply-related events in such states and countries could have a disproportionate impact on the prices of such commodities. These imbalances and/or disruptions may be significant due to the length of time required to alter the supply of some commodities in response to changes in demand.

 

When-Issued, Delayed Delivery, and Forward Commitment Transaction Risk: The purchaser in a when-issued, delayed delivery or forward commitment transaction assumes the rights and risks of ownership, including the risks of price and yield fluctuations and the risk that the security will not be issued or delivered as anticipated, and the seller loses the opportunity to benefit if the price of the security rises. When-issued, delayed delivery, and forward commitment transactions can involve leverage.

 

Derivatives Risk: Derivatives can be highly volatile and involve risks in addition to, and potentially greater than, the risks of the underlying indicator(s). Gains or losses from derivatives can be substantially greater than the derivatives’ original cost and can sometimes be unlimited. Derivatives can involve leverage. Derivatives can be complex instruments and can involve analysis and processing that differs from that required for other investment types used by the fund. If the value of a derivative does not change as expected relative to the value of the market or other indicator to which the derivative is intended to provide exposure, the derivative may not have the effect intended. Derivatives can also reduce the opportunity for gains or result in losses by offsetting positive returns in other investments. Derivatives can be less liquid than other types of investments.

 

Leveraging Risk: Certain transactions and investment strategies can result in leverage. Leverage involves investment exposure in an amount exceeding the initial investment. In transactions involving leverage, a relatively small change in an underlying indicator can lead to significantly larger losses to the fund. Leverage can cause increased volatility by magnifying gains or losses.

 

Counterparty and Third Party Risk: Transactions involving a counterparty other than the issuer of the instrument, including clearing organizations, or a third party responsible for servicing the instrument or effecting the transaction, are subject to the credit risk of the counterparty or third party, and to the counterparty’s or third party’s ability or willingness to perform in accordance with the terms of the transaction. If a counterparty or third party fails to meet its contractual obligations, goes bankrupt, or otherwise experiences a business interruption, the fund could miss investment opportunities, lose value on its investments, or otherwise hold investments it would prefer to sell, resulting in losses for the fund.

 

Liquidity Risk: Certain investments and types of investments are subject to restrictions on resale, may trade in the over-the-counter market, or may not have an active trading market due to adverse market, economic, industry, political, regulatory, geopolitical,

 

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MFS Lifetime 2040 Fund

 

environmental, public health, and other conditions, including trading halts, sanctions, or wars. Investors trying to sell large quantities of a particular investment or type of investment, or lack of market makers or other buyers for a particular investment or type of investment may also adversely affect liquidity. At times, all or a significant portion of a market may not have an active trading market. Without an active trading market, it may be difficult to value, and it may not be possible to sell, these investments and the fund could miss other investment opportunities and hold investments it would prefer to sell, resulting in losses for the fund. In addition, the fund may have to sell certain of these investments at prices or times that are not advantageous in order to meet redemptions or other cash needs, which could result in dilution of remaining investors’ interests in the fund. The prices of illiquid securities may be more volatile than more liquid investments.

 

Large Shareholder Risk: From time to time, shareholders of the fund (which may include institutional investors, financial intermediaries, or other MFS funds) may make relatively large redemptions or purchases of fund shares. These transactions may cause the fund to sell securities or invest additional cash, as the case may be, at disadvantageous prices. While it is impossible to predict the overall impact of these transactions over time, there could be adverse effects on the fund’s performance to the extent that the fund may be required to sell securities or invest cash at times it would not otherwise do so. Redemptions of a large number of shares also may increase transaction and other costs or have adverse tax consequences for shareholders of the fund by requiring a sale of portfolio securities. In addition, a large redemption could result in the fund’s current expenses being allocated over a smaller asset base, leading to an increase in the fund’s expense ratio. Purchases of a large number of shares may adversely affect the fund’s performance to the extent that it takes time to invest new cash and the fund maintains a larger cash position than it ordinarily would.

 

Other Investment Strategies and Risks

 

Active and Frequent Trading: MFS may engage in active and frequent trading in pursuing the fund’s principal investment strategies. Frequent trading may increase transaction costs, which can reduce the fund’s return. Frequent trading can also increase the possibility of capital gain and ordinary distributions. Frequent trading can also result in the realization of a higher percentage of short-term capital gains and a lower percentage of long-term capital gains as compared to a fund that trades less frequently. Because short-term capital gains are distributed as ordinary income, this would generally increase your tax liability unless you hold your shares through a tax-advantaged or tax-exempt vehicle.

 

Operational and Cybersecurity Risk: The fund and its service providers, and your ability to transact with the fund, may be negatively impacted due to operational matters arising from, among other issues, human errors, systems and technology disruptions or failures, fraudulent activities, or cybersecurity incidents. Operational issues and cybersecurity incidents may cause the fund or its service providers, as well as securities trading venues and other market participants, to suffer data corruption and/or lose operational functionality, and could, among other things, interfere with the processing of shareholder transactions, impair the ability to calculate the fund’s net asset value per share, impede trading of portfolio securities, and result in the theft, misuse, and/or improper release of confidential information relating to the fund or its shareholders. Such operational issues and cybersecurity incidents may result in losses to the fund and its shareholders.

 

Temporary Defensive Strategy: In response to adverse market, economic, industry, political, or other conditions, MFS may depart from the fund’s principal investment strategies by temporarily investing for defensive purposes. When MFS invests defensively, different factors could affect the fund’s performance and the fund may not achieve its investment objective. In addition, the defensive strategy may not work as intended.

 

Further Information on Investment Strategies, Types, and Risks: Information about investment strategies and investment types not described in the prospectus and the risks associated with those investment strategies and investment types are described in the fund’s Statement of Additional Information (SAI).

 

Management of the Fund

 

Investment Adviser

 

MFS, located at 111 Huntington Avenue, Boston, Massachusetts 02199, serves as the investment adviser for the fund. Subject to the supervision of the fund’s Board of Trustees, MFS is responsible for managing the fund’s investments, executing transactions, and providing related administrative services and facilities under an Investment Advisory Agreement between the fund and MFS.

 

The fund pays no management fee to MFS; however, the underlying funds pay management fees to MFS which are reflected under “Summary of Key Information-Fees and Expenses” above.

 

MFS has agreed in writing to bear the fund’s expenses, excluding management fees, distribution and service fees, interest, taxes, extraordinary expenses, brokerage and transaction costs, investment-related expenses, and fees and expenses associated with investments in investment companies and other similar investment vehicles, or make payment to the fund, such that “Other Expenses” do not exceed 0.00% of the class’ average daily net assets annually for each of Class A, Class B, Class C, Class I, Class R1, Class R2, Class R3, and Class R4 shares, and (0.14)% of the class’ average daily net assets annually for Class R6 shares. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue until at least August 31, 2024. During the term of this agreement, Class R6 shares will receive payments from MFS in excess of its “Other Expenses” in an amount equal to at least 0.14% of the class’ average daily net assets.

 

A discussion regarding the basis for the Board of Trustees’ approval of the Investment Advisory Agreement is available in the fund’s semiannual report for the six-month period ended October 31, 2022.

 

MFS is America’s oldest mutual fund organization. MFS and its predecessor organizations have a history of money management dating from 1924 and the founding of the first mutual fund, Massachusetts Investors Trust. Net assets under the management of the MFS organization were approximately $589 billion as of June 30, 2023.

 

Disclosure of Portfolio Holdings. The fund has established a policy with respect to the disclosure of fund portfolio holdings. A description of this policy is provided in the SAI.

 

The following information is available to you at mfs.com/openendfunds by selecting the fund’s name:

 

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MFS Lifetime 2040 Fund

 

Information   Approximate Date of Posting
Fund’s top 10 holdings as of each month’s end   11 days after month end
Fund’s top 10 equity holdings as of each month’s end   11 days after month end
Fund’s top 10 fixed income holdings as of each month’s end   11 days after month end
Fund’s holdings of underlying MFS funds as of each month’s end   11 days after month end

 

Top 10 holdings, top 10 equity holdings, and top 10 fixed income holdings are aggregated disclosed holdings of the underlying MFS funds. Top 10 holdings exclude cash, cash equivalents, short-term investments, currency derivatives, and the cash portion of other derivatives.

 

Full holdings of the underlying MFS funds in which the fund invests are available 19 days after month end or 24 days after month end (depending on the underlying fund). The most recently disclosed full holdings of the underlying MFS funds are available by selecting an underlying fund’s name under “MFS Fund Holdings (%)” on the fund’s Website at mfs.com. For purposes of full holdings, cash, cash equivalents, and short-term investments are aggregated and currency derivatives and the cash portion of other derivatives are aggregated.

 

Note that the fund or MFS may suspend the posting of this information or modify the elements of this Web posting policy without notice to shareholders. Once posted, the above information will generally remain available on mfs.com until at least the date on which the fund files a Form N-CSR or Form N-PORT for the period that includes the date as of which the mfs.com information is current.

 

Portfolio Manager(s)

 

Information regarding the portfolio manager(s) of the fund is set forth below. Further information regarding the portfolio manager(s), including other accounts managed, compensation, ownership of fund shares, and possible conflicts of interest, is available in the fund’s SAI.

 

Portfolio Manager   Primary Role   Five Year History
Joseph Flaherty, Jr.   Portfolio Manager, General Oversight of a Team of Investment Professionals   Employed in the investment area of MFS since 1993
Benjamin Nastou   Portfolio Manager, General Oversight of a Team of Investment Professionals   Employed in the investment area of MFS since 2001
Natalie Shapiro   Portfolio Manager, General Oversight of a Team of Investment Professionals   Employed in the investment area of MFS since 1997
Erich Shigley   Portfolio Manager, General Oversight of a Team of Investment Professionals   Employed in the investment area of MFS since 2013

 

Administrator

 

MFS provides the fund with certain financial, legal, and other administrative services under a Master Administrative Services Agreement between the fund and MFS. Under the Agreement, MFS is paid an annual fee for providing these services.

 

Distributor

 

MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, is the distributor of shares of the fund.

 

Shareholder Servicing Agent

 

MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, provides dividend and distribution disbursing and transfer agent and recordkeeping functions in connection with the issuance, transfer, and redemption of each class of shares of the fund under a Shareholder Servicing Agent Agreement. MFSC receives a fee based on the costs it incurs in providing these services and a target profit margin. In addition, MFSC is reimbursed for payments made to service providers that provide certain sub-accounting and other shareholder services (shareholder servicing payments) and its out-of-pocket expenses. No shareholder servicing payments are made for Class R6 shares.

 

Description of Share Classes

 

The fund offers Class A, Class B, Class C, Class I, Class R1, Class R2, Class R3, Class R4, and Class R6 shares through this prospectus. All classes of the fund have the same investment objective and investments, but each class has its own sales charge and expense structure. Your financial intermediary may also charge you additional fees, commissions, or other charges. You should consult with your financial intermediary to help you determine which class is most appropriate for you.

 

Purchases of Class B shares are closed to new and existing investors except through reinvestment of dividends and capital gain distributions. Existing investors may continue to exchange their Class B shares for the same share class of another MFS fund.

 

Effective after the close of business on September 29, 2023, purchases of Class R1 and Class R2 shares are closed to new eligible investors. After the close of business on September 29, 2023, existing eligible investors can make additional purchases and reinvest distributions in Class R1 and Class R2 shares in any account open as of the close of business on September 29, 2023. Existing eligible investors, after the close of business on September 29, 2023, may also exchange their Class R1 and Class R2 shares for the same share class of another MFS fund, open new Class R1 and Class R2 share accounts in other MFS funds, and transfer some or all of the shares in their account to another account and such account will be treated as having been open as of the close of business on September 29, 2023. Subject to the approval of the fund’s Board of Trustees, the fund may in the future (i) close purchases of Class R1 and/or Class R2 shares to existing eligible investors; (ii) terminate and liquidate Class R1 and/or Class R2 shares; or (iii) convert Class R1 and/or Class R2 shares to another share class of the fund. Such actions may be undertaken without shareholder approval, but the fund expects to provide shareholders with at least 60 days’ notice before taking any such action.

 

Share Class Eligibility

 

Your financial intermediary is responsible for determining if you meet any share class eligibility requirements. MFS does not generally monitor any share class eligibility requirements.

 

Class A, Class B, and Class C shares do not have any share class eligibility requirements.

 

Class I shares generally are available only to the following eligible investors:

 

certain retirement plans established for the benefit of employees and former employees of MFS or its affiliates;

 

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MFS Lifetime 2040 Fund

 

defined benefit retirement plans, endowments, or foundations;
bank trust departments or law firms acting as trustee or manager for trust accounts;
investors who purchase shares through asset-based fee programs available through financial intermediaries;
employees and former employees of MFS and its subsidiaries who were employed by MFS or its subsidiaries on or after January 1, 2013, trusts, pension, profit-sharing or other retirement plans for the sole benefit of such persons, and joint accounts with such persons’ spouses or legal equivalents under applicable state law; and
trustees and former trustees of any investment company for which MFD serves as a distributor and who served as trustee on or after January 1, 2013, trusts, pension, profit-sharing or other retirement plans for the sole benefit of such persons, and joint accounts with such persons’ spouses or legal equivalents under applicable state law.

 

Class I shares are also available to other institutional investors who have entered into an agreement with MFD to purchase Class I shares and investors who purchase shares through brokerage programs of certain financial intermediaries that have entered into an agreement with MFD to offer Class I shares through such programs. In addition, Class I shares are available to investors whose Class A, Class B, or Class C shares have been converted to Class I shares as a result of no financial intermediary being specified on the investor’s account. (Please see “Conversion Among Share Classes” below.)

 

Class R1, Class R2, Class R3, and Class R4 shares generally are available only to eligible retirement plans (401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans any of whose accounts are maintained by the fund at an omnibus level (“Employer Retirement Plans”)), and health savings accounts under Section 223 of the Internal Revenue Code if such accounts are maintained by the fund at an omnibus level.

 

Class R1, Class R2, Class R3, and Class R4 shares generally are not available to traditional and Roth IRAs, Coverdell Educational Savings Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, salary reduction only 403(b) plans, and Section 529 tuition plans.

 

Class R6 shares generally are available only to the following eligible investors:

 

Employer Retirement Plans;
health savings accounts under Section 223 of the Internal Revenue Code if such accounts are maintained by the fund at an omnibus level;
investment companies distributed by MFD;
endowments and foundations, local, city and state agencies (or entities acting on their behalf);
funded welfare benefit plans (e.g., Voluntary Employees’ Beneficiary Association (VEBA) and Other Post-Employment (OPEB) plans);
unaffiliated registered investment companies;
collective investment trusts;
investors who purchase shares through asset-based fee programs of certain financial intermediaries that have entered into an agreement with MFD to offer Class R6 shares through such programs; and
Section 529 tuition plans that have entered into an agreement with MFD to purchase Class R6 shares.

 

Class R6 shares are also available to other institutional investors who have entered into an agreement with MFD to purchase Class R6 shares and investors who purchase shares through brokerage programs of certain financial intermediaries that have entered into an agreement with MFD to offer Class R6 shares through such programs.

 

Conversion Among Share Classes

 

If you hold Class B shares for approximately eight years, they will convert to Class A shares of the fund. For purposes of calculating the conversion date, purchases made on any day during a calendar month will age one month at the close of business on the last day of that month, and at the close of business on the last day of each subsequent month.

 

All Class B shares you acquire through the reinvestment of dividends and distributions will be held in a separate sub-account. Each time any Class B shares in your account convert to Class A shares, a proportionate number of the Class B shares in the sub-account will also convert to Class A shares.

 

For shareholders invested in Class B shares through a financial intermediary, it is the responsibility of the financial intermediary to ensure that the investor is credited with the proper holding period. The automatic conversion of Class B shares to Class A shares will not apply to shares held through financial intermediaries that do not track the length of time that a shareholder has held such shares. Please consult your financial intermediary for more information.

 

If you hold Class C shares for approximately eight years, they will convert to Class A shares of the fund. For purposes of calculating the conversion date, purchases made on any day during a calendar month will age one month at the close of business on the last day of that month, and at the close of business on the last day of each subsequent month.

 

All Class C shares you acquire through the reinvestment of dividends and distributions will be held in a separate sub-account. Each time any Class C shares in your account convert to Class A shares, a proportionate number of the Class C shares in the sub-account will also convert to Class A shares.

 

For shareholders invested in Class C shares through a financial intermediary, it is the responsibility of the financial intermediary to ensure that the investor is credited with the proper holding period. The automatic conversion of Class C shares to Class A shares will not apply to shares held through financial intermediaries that do not track the length of time that a shareholder has held such shares. In addition, for shareholders invested in Class C shares through a financial intermediary, Class C shares may be automatically exchanged for Class A shares of the fund under the policies of the financial intermediary, as described in Appendix A of this prospectus.  It is solely the responsibility of the respective financial intermediary to administer and support such transactions. Please consult your financial intermediary for more information.

 

Class C shareholders of the fund may be able to convert their shares to Class A shares of the fund if their financial intermediary provides written notification to MFD prior to such conversion that the intermediary has determined that Class A was the appropriate share class at the time of purchase for such shareholder and receives approval of such conversion by MFD. Class C shareholders also may be able to convert their Class C shares not subject to a CDSC to Class I shares of the fund if they satisfy eligibility requirements of Class I shares.

 

Shareholders may be able to convert between Class A shares and Class I shares of the fund if they satisfy eligibility requirements for

 

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MFS Lifetime 2040 Fund

 

the other class, if any. Class I shareholders may be able to convert their Class I shares to Class R6 shares of the fund if they satisfy eligibility requirements of Class R6 shares.

 

Class A, Class B, or Class C shares in an account held directly with MFSC for which no financial intermediary is specified will be periodically converted to Class I shares as authorized by MFD. If your Class A, Class B, or Class C shares are converted to Class I shares pursuant to this conversion feature, all future purchases in your account will be invested in Class I shares. Shareholders will generally be provided with written notice at least 30 days prior to a conversion of their Class A, Class B, or Class C shares to Class I shares.

 

If a shareholder converts from one share class to another share class of the fund, as described above, the transaction will be based on the respective net asset value of each class as of the trade date for the conversion. Consequently, the converting shareholder may receive fewer shares or more shares than originally owned, depending on that day’s net asset values. The total value of the initially held shares, however, will equal the total value of the converted shares received. A conversion between share classes in the same fund, as described above, is a nontaxable event for federal income tax purposes.

 

Sales Charges and Waivers and Reductions

 

You may be subject to an initial sales charge when you purchase Class A shares, or a CDSC when you redeem Class A, Class B, or Class C shares. These sales charges are paid to MFD.

 

You may qualify for a sales charge waiver or reduction when you purchase or redeem shares. The waivers or reductions that are applicable to your transaction depend on your financial intermediary and the type of account and transaction. Further details regarding these waivers and reductions are provided in Appendix A of this prospectus. It is your responsibility to inform your financial intermediary or MFSC upon purchasing fund shares of your eligibility for a sales charge waiver or reduction. Waivers or reductions may be eliminated, modified, and added at any time without providing advance notice to shareholders.

 

Class A Shares. You may purchase Class A shares at the offering price (which includes the applicable initial sales charge).

 

The amount of the initial sales charge you pay when you buy Class A shares differs depending upon the amount you invest, as follows:

 

    INITIAL SALES CHARGE AS PERCENTAGE OF:  

 

Amount of Purchase

  GROSS PURCHASE
AMOUNT (OFFERING
PRICE*)
    NET AMOUNT INVESTED  
Less than $50,000     5.75 %     6.10 %
$50,000 but less than $100,000     4.75 %     4.99 %
$100,000 but less than $250,000     3.75 %     3.90 %
$250,000 but less than $500,000     2.75 %     2.83 %
$500,000 but less than $1,000,000     2.00 %     2.04 %
$1,000,000 or more     None       None  

 

 

* Offering price is calculated by dividing the net asset value of a share by the difference between 1 and the initial sales charge percentage. Because the offering price is rounded to two decimal places, actual sales charges you pay may be more or less than those calculated using these percentages.

 

You may purchase Class A shares without an initial sales charge when you invest $1 million or more in Class A shares. However, for purchasers other than Employer Retirement Plans, a CDSC of 1% will generally be deducted from your redemption proceeds if you redeem within 18 months of purchase.

 

Purchases of the fund and exchanges out of the fund are subject to the MFS funds’ policies concerning disruptive trading practices. This includes exchanges out of the fund within a short period of time after purchase for the purpose of avoiding a higher initial sales charge on the MFS fund into which you exchange. The MFS funds reserve the right to restrict, reject, or cancel, without any prior notice, any purchase or exchange order believed to represent frequent or other disruptive trading. In such situations, the MFS funds may prohibit future purchases from you and/or the financial intermediary associated with your account. See “How to Purchase, Redeem, and Exchange Shares—Disruptive Trading” for more information regarding MFS funds’ policies concerning disruptive trading practices.

 

Class B Shares. You may purchase Class B shares at net asset value without an initial sales charge, but if you redeem your shares within the first six years after purchase, you may be subject to a CDSC (declining from 4% during the first year to 0% after six years).

 

The CDSC is imposed according to the following schedule:

 

Year of redemption after purchase   1st   2nd   3rd   4th   5th   6th   7th
Contingent deferred sales charge     4 %     4 %     3 %     3 %     2 %     1 %     0 %

 

Class C Shares. You may purchase Class C shares at net asset value without an initial sales charge. However, a CDSC of 1% will generally be deducted from your redemption proceeds if you redeem within 12 months of your purchase.

 

Class I Shares. Eligible investors may purchase Class I shares at net asset value without an initial sales charge or a CDSC upon redemption.

 

Class R1, Class R2, Class R3, Class R4, and Class R6 Shares. Eligible investors may purchase Class R1, Class R2, Class R3, Class R4, and Class R6 shares at net asset value without an initial sales charge or a CDSC upon redemption.

 

Calculation Of CDSC. As discussed above, certain investments in Class A, Class B, and Class C shares are subject to a CDSC. For purposes of calculating the CDSC, purchases made on any day during a calendar month will age one month at the close of business on the last day of that month, and at the close of business on the last day of each subsequent month. The CDSC is based on the original purchase cost or the current market value of the shares being sold, whichever is less. For purposes of determining the CDSC, if you sell only some of your shares, shares not subject to a CDSC are sold first, followed by shares held the longest.

 

Shares acquired through reinvestment of distributions are not subject to a CDSC.

 

Distribution and Service Fees

 

The fund has adopted a plan in accordance with Rule 12b-1 under the Investment Company Act of 1940, as amended (the “Distribution Plan”). Under the Distribution Plan, the fund pays distribution and/or service fees to MFD to support the sale and distribution of Class A, Class B, Class C, Class R1, Class R2, and Class R3 shares, and/or shareholder servicing and account maintenance activities. These distribution and/or service fees equal on an annual basis up to the following maximum percentages of average daily net assets of the class:

 

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MFS Lifetime 2040 Fund

 

CLASS   Maximum
Distribution Fee
    Maximum Service
Fee
    Maximum Total
Distribution and
Service Fee
 
Class A     0.00 %     0.25 %     0.25 %
Class B     0.75 %     0.25 %     1.00 %
Class C     0.75 %     0.25 %     1.00 %
Class R1     0.75 %     0.25 %     1.00 %
Class R2     0.25 %     0.25 %     0.50 %
Class R3     0.00 %     0.25 %     0.25 %

 

These fees are paid out of fund assets of the applicable class of shares. Because these fees are an ongoing expense of the fund, they increase the cost of your investment over time and may cost you more than other types of sales charges.

 

MFD has voluntarily agreed to rebate to the class a portion of such class’ 0.25% service fee attributable to accounts for which there is no financial intermediary specified on the account except for accounts attributable to seed money of MFS or an affiliate.

 

The fund has not adopted a Rule 12b-1 plan with respect to its Class I, Class R4, or Class R6 shares.

 

Financial Intermediary Compensation

 

The term “financial intermediary” refers to any broker/dealer, bank (including bank trust departments), registered investment adviser, financial planner, retirement plan administrator, third-party administrator, insurance company, consultant, and any other institution having a selling, administration, or any similar agreement with MFD, MFS, or any of their affiliates.

 

Financial intermediaries receive various forms of compensation in connection with the sale of shares of a fund and/or the servicing of shareholder accounts. Financial intermediaries receive such compensation (i) in the form of up-front commissions and ongoing asset-based compensation paid by MFD based on sales charges received and expected to be received by MFD from shareholders and Distribution Plan distribution and service payments received by MFD from the fund, (ii) in the form of shareholder servicing payments paid by an affiliate of MFD based on the receipt of such payments by MFD or its affiliates from the fund, and/or (iii) in the form of payments paid by MFD from MFD’s own additional resources.

 

Financial intermediaries receive up-front commissions of up to the following percentage amount(s) for sales of the following share class(es):

 

Share Class   Up Front Commission as a
Percentage of Offering Price
 
Class A     5.75 %
Class B     3.75 %
Class C     1.00 %

 

In addition, certain financial intermediaries receive payments from MFD from MFD’s own additional resources as incentives to market the MFS funds, to participate in MFD’s promotional efforts and/or in recognition of their marketing support, administrative services, and/or transaction processing support. This compensation from MFD is not reflected in the “Fees and Expenses” table in the fund’s prospectus. MFD compensates financial intermediaries based on criteria established by MFD from time to time, including the distribution potential of the financial intermediary, the types of products and programs offered by the financial intermediary, eligibility for placement on the financial intermediary’s preferred or recommended list, the financial and contractual terms with the financial intermediary, the level and/or type of marketing and administrative support provided by the financial intermediary, and the quality of the overall relationship with the financial intermediary. In particular, MFD normally considers the level of assets attributable to the financial intermediary, the level of redemptions by the financial intermediary, the level of access to the financial intermediary’s representatives and management, the ability to educate the representatives of the financial intermediary about the MFS funds, and the number of representatives of the financial intermediary potentially utilizing the MFS funds with their clients.

 

MFD makes these additional payments to financial intermediaries for marketing support and administrative services with respect to fund shares sold or held through the financial intermediary’s distribution network and/or through programs such as retirement programs, qualified tuition programs, fund supermarkets, fee-based advisory or wrap fee programs, bank trust programs, and insurance (e.g., individual or group annuity) programs. MFD also makes payments to certain financial intermediaries to help offset the costs associated with client account maintenance support, statement preparation, and transaction processing. To the extent permitted by U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) rules and other applicable laws and regulations, MFD makes other payments or allows other promotional incentives or payments to financial intermediaries.

 

The types of payments described above are not exclusive and such payments can be significant to the financial intermediary. In addition, the compensation that financial intermediaries receive may vary by class of shares sold and among financial intermediaries. Depending upon the arrangements in place at any particular time, financial intermediaries may have a financial incentive to recommend a particular fund or share class when a less expensive option with the same or similar characteristics is available or to recommend MFS funds instead of other funds that generate less or no compensation for the financial intermediary. Likewise, such compensation could create incentives for the financial intermediary to hold an investment longer than might be appropriate, or conversely, to make more frequent exchanges or other transactions than might be necessary.

 

You can find further details in the SAI about the payments made by MFD and its affiliates and the services provided by financial intermediaries. Financial intermediaries may charge you additional fees and/or commissions other than those disclosed in this prospectus. You should ask your financial intermediary for information about any payments it receives from MFD and its affiliates and any services it provides, as well as about fees and/or commissions it charges you. Financial intermediaries that sell fund shares may also act as a broker/dealer in connection with an MFS fund’s purchase or sale of portfolio securities. However, the fund and MFS do not consider financial intermediaries’ sales of shares of an MFS fund as a factor when choosing broker/dealers to effect portfolio transactions for the MFS funds.

 

How To Purchase, Redeem, and Exchange Shares

 

You may purchase, redeem, and exchange shares of the fund in the manner described below. The fund is generally only available to U.S. residents with a valid U.S. tax identification number (and to certain other qualified investors). If you buy or sell shares of a fund through a retirement account, Section 529 tuition plan, or financial intermediary, the procedures for buying, selling, and exchanging shares of the fund and the features, policies, and fees may differ from those discussed in this prospectus. Investment minimums may

 

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MFS Lifetime 2040 Fund

 

be waived or reduced for certain types of investors and investments and your financial intermediary may have additional minimums.

 

How to Purchase Shares

 

Your shares will be bought at the offering price (the net asset value per share plus any applicable initial sales charge) next calculated after your purchase order is received in proper form. Your financial intermediary is responsible for transmitting your purchase order to the fund in proper form and in a timely manner. MFSC reserves the right to reject any purchase order that is not in proper form. The specific requirements for proper form depend on the type of account and transaction and the method of purchase; contact MFSC if you have questions about your particular circumstances. Certain restrictions apply to the use of a transfer on death registration. You or your financial intermediary should contact MFSC to obtain a Transfer on Death registration form and for information regarding MFSC’s other requirements for transfer on death registrations. If payment for a purchase order is not received by the time required under applicable law, your purchase order may be cancelled and your financial intermediary could be liable for any costs or losses.

 

The fund may reject for any reason, or cancel as permitted or required by law, any purchase orders. The fund may stop offering shares completely, or may offer shares only on a limited basis, for a period of time or permanently.

 

The fund is required by law to obtain from you certain information that will be used to verify the identity of the account owner. If you do not provide the information, the fund will not be able to open your account. The fund must also take certain steps to verify that the account information you provide is correct.

 

Purchases of Class B shares are closed to new and existing investors except through reinvestment of dividends and capital gain distributions. Existing investors may continue to exchange their Class B shares for the same share class of another MFS fund.

 

Effective after the close of business on September 29, 2023, purchases of Class R1 and Class R2 shares are closed to new eligible investors. After the close of business on September 29, 2023, existing eligible investors can make additional purchases and reinvest distributions in Class R1 and Class R2 shares in any account open as of the close of business on September 29, 2023. Existing eligible investors, after the close of business on September 29, 2023, may also exchange their Class R1 and Class R2 shares for the same share class of another MFS fund, open new Class R1 and Class R2 share accounts in other MFS funds, and transfer some or all of the shares in their account to another account and such account will be treated as having been open as of the close of business on September 29, 2023. Subject to the approval of the fund’s Board of Trustees, the fund may in the future (i) close purchases of Class R1 and/or Class R2 shares to existing eligible investors; (ii) terminate and liquidate Class R1 and/or Class R2 shares; or (iii) convert Class R1 and/or Class R2 shares to another share class of the fund. Such actions may be undertaken without shareholder approval, but the fund expects to provide shareholders with at least 60 days’ notice before taking any such action.

 

Class A, Class B, and Class C Shares. You can establish an account by having your financial intermediary process your purchase or by contacting MFSC directly.

 

Purchases of Class B shares are subject to a total account value limitation at the time of purchase of $99,999, and purchases of Class C shares are subject to a total account value limitation at the time of purchase of $999,999. If your existing accounts for all share classes held with the MFS funds have a total value equal to $99,999 for Class B share purchases or $999,999 for Class C share purchases, you will not be able to purchase Class B or Class C shares, as applicable. For the purpose of determining your total account value, existing accounts for all share classes held with the MFS funds that are linked under a Letter of Intent or Right of Accumulation will be included.

 

The fund or its agents may at their discretion accept a purchase request for Class B shares or Class C shares that would otherwise exceed the total account value limitation of $99,999 and $999,999, respectively, under certain circumstances, including purchases by certain types of group or sponsored retirement plans.

 

Class I Shares. You can establish an account through your MFD representative, by having your financial intermediary process your purchase, or by contacting MFSC directly.

 

Class R1, Class R2, Class R3, Class R4, and Class R6 Shares. You can establish an account through your financial intermediary or by contacting MFSC directly. For Class R6 investors, you can also establish your account through your MFD representative.

 

Additional Purchases

 

You may purchase additional shares through your financial intermediary or MFSC.

 

Additional Purchases Directly Through MFSC.

 

Mail. You may purchase additional shares by mailing a check with your investment instructions to MFSC.
Telephone. You may purchase additional shares by phone from your pre-designated bank account. You must elect this privilege on your account application or service application. Purchases via telephone are not available for certain types of accounts.
Internet. You may purchase additional shares from a pre-designated bank account via the Internet at mfs.com (MFS Access). You must elect this privilege on your account application or service application and establish a password on MFS Access to use this service. Purchases via the Internet are not available for Class R1, Class R2, Class R3, Class R4, and Class R6 shares, and certain types of accounts.
Wire. To purchase additional shares by wire, call MFSC for instructions.
Automatic Investment Plan. You may purchase additional shares by automatically investing a designated amount from your checking or savings account on any day of the month. You must elect this privilege on your account application or service application.

 

Additional Purchases Through Your Financial Intermediary. You can have your financial intermediary purchase shares on your behalf. Your financial intermediary will be responsible for furnishing all necessary documents to MFSC and may charge you for this service.

 

How to Redeem Shares

 

Your shares will be sold at the net asset value per share next calculated after your redemption order is received in proper form, minus any applicable CDSC and/or other fees. Your financial intermediary is responsible for transmitting your redemption order to the fund in proper form and in a timely manner. MFSC reserves the right to reject any redemption request that is not in proper form. The specific requirements for proper form depend on the type of account and transaction and the method of redemption; contact MFSC if you have questions about your particular circumstances.

 

In certain circumstances, you will need to have your signature guaranteed and/or submit additional documentation to redeem your shares. In general, no signature guarantee is required for a

 

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redemption order for up to $100,000 that is signed by all owners or fiduciaries identified in the account registration, paid as registered, and mailed to the address of record. However, if you have changed your address of record within 30 days of your redemption order, a Medallion signature guarantee will generally be required. A Medallion signature guarantee will also generally be required if you want to send your redemption proceeds to a pre-designated bank account that was added or changed on your account within 30 days of your redemption order.

 

The fund typically processes your redemption proceeds, after your request is received in proper form, by the end of the next business day for payment by wire and payment processed through DTCC’s Defined Contribution Clearance & Settlement System or Fund/SERV system (financial intermediaries can choose to have payments processed through the Fund/SERV system by the end of the second business day instead of the next business day), and by the end of the second business day for payment by check and Automated Clearing House. However, the fund may delay processing your redemption request for up to seven days. Under unusual circumstances, such as when the NYSE is closed, trading on the NYSE is restricted, or as permitted by the SEC, the fund may suspend redemptions or postpone payment for more than seven days.

 

If you recently purchased shares and subsequently request a redemption, redemption proceeds (other than in an exchange) for the shares you recently purchased will generally be delayed until money from such purchases sufficient to cover your redemption has been received and collected. Receiving and collecting payment can take up to seven business days after a purchase. You can avoid this delay by purchasing shares by wire transfer.

 

The fund typically expects to meet redemption requests by holding cash and/or cash equivalents, selling investments, and using overdraft provisions or lines of credit. The fund may also meet redemption requests by redeeming shares in kind for large redemptions or during stressed market conditions. If, during any 90-day period, you redeem shares in an amount greater than the lesser of $250,000 or 1% of fund net assets, and if MFS determines it to be feasible and appropriate, the fund may pay the redemption amount above such threshold by a distribution in kind of portfolio securities (redemption in kind). In the event that the fund makes a redemption in kind, you should expect to incur brokerage and other transaction charges when converting the securities to cash, and the securities will likely increase or decrease in value before you sell them.

 

You may redeem your shares either by having your financial intermediary process your redemption or by contacting MFSC directly.

 

Redeeming Directly Through MFSC.

 

Mail. To redeem shares by mail, you can send a letter, or the applicable redemption form, to MFSC with the name of the fund, your account number, and the number of shares or dollar amount to be redeemed. MFSC currently charges a fee to send your proceeds via overnight mail.
Telephone. If a signature guarantee is not required, you can call MFSC to have shares redeemed from your account and proceeds mailed to the address of record on the account. MFSC currently charges a fee to send your proceeds via overnight mail. You can also call MFSC to have shares redeemed from your account and the proceeds sent directly to a pre-designated bank account. You must elect this privilege on your account application or service application if you wish to have proceeds sent to your bank account. Telephone redemptions are not available for certain types of accounts.
Internet. If a signature guarantee is not required, you can have shares redeemed from your account via the Internet at mfs.com (MFS Access) and the proceeds mailed to the address of record on the account. You can also have shares redeemed from your account via MFS Access and the proceeds sent directly to a pre-designated bank account. You must elect this privilege on your account application or service application and establish a password on MFS Access to use this service. Redemptions via the Internet are not available for Class R1, Class R2, Class R3, Class R4, and Class R6 shares, and certain types of accounts.
Systematic Withdrawal Plan (not available for Class R1, Class R2, Class R3, Class R4, and Class R6 shares). If you have a balance of at least $5,000 in your account in the fund, you may elect to automatically receive (or designate someone else to receive) regular periodic payments (of at least $50 if by check) through an automatic redemption of such classes. The fund may terminate any Systematic Withdrawal Plan for an account if the value of the account falls below $5,000 as a result of share redemptions (other than as a result of a Systematic Withdrawal Plan). Please contact MFSC or your financial intermediary for details.

 

Redeeming Through Your Financial Intermediary. You can have your financial intermediary process a redemption on your behalf. Your financial intermediary will be responsible for furnishing all necessary documents to MFSC and may charge you for this service.

 

Signature Guarantee/Additional Documentation. If a Medallion signature guarantee is required, your signature may be guaranteed by an eligible bank, broker/dealer, credit union, national securities exchange, registered securities association, clearing agency, or savings association that participates in a Medallion program recognized by the Securities Transfer Association. MFSC may require additional documentation for certain types of registrations and under certain circumstances. Signature guarantees and this additional documentation shall be accepted in accordance with policies established by MFSC, and MFSC may, at its discretion, change and make certain exceptions to these requirements. Please contact MFSC with any questions and for the requirements for your particular situation.

 

Share Certificates. If certificates are outstanding for your shares, you may only redeem such shares by mailing the certificates to MFSC. Telephone, electronic, and systematic withdrawal plan redemptions and checkwriting are not available if certificates are outstanding for your shares.

 

Involuntary Redemptions. Because it is costly to maintain small accounts, the MFS funds have reserved the right to redeem your Class A, Class B, Class C, or Class I shares without your permission when your account contains less than $500 for any reason, including market fluctuation. Before the fund makes such a redemption, you will be notified and given 60 days to increase your investment to at least $500. Certain accounts are not subject to these provisions. Any applicable CDSC will be waived for shares redeemed due to the small size of a shareholder’s account.

 

In addition, the MFS funds have reserved the right to redeem your shares without your permission in cases of threatening conduct or

 

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suspicious, fraudulent, or illegal activity. Any applicable CDSC will be assessed upon redemption of your shares.

 

How to Exchange Shares

 

An exchange involves the redemption of shares of one fund and the purchase of shares of another fund.

 

Exchange Privilege. You can exchange your shares for shares of the same class, if available, of most other MFS funds at their respective net asset values by having your financial intermediary process your exchange request or by contacting MFSC directly.

 

You can exchange your Class A shares and your Class I shares for shares of MFS U.S. Government Money Market Fund, if available, according to the terms of such fund’s prospectus.

 

Shares otherwise subject to a CDSC will not be charged a CDSC in an exchange. Shares will retain the CDSC schedule in effect based upon a pro rata share of the CDSC from the exchanged fund and the original purchase date of the shares subject to the CDSC.

 

You should read the prospectus of the MFS fund into which you are exchanging and consider the differences in investment objectives, policies, and risks, and in fees and expenses, before making an exchange. The exchange privilege may be changed or discontinued at any time, and all exchanges are subject to certain limitations and the MFS funds’ policies concerning disruptive trading practices, which are designed to protect the funds and their shareholders from the harmful effects of frequent trading. No more than ten exchanges may be made in any one exchange request by telephone.

 

The MFS funds allow certain financial intermediaries to place exchange orders on behalf of a group of their discretionary investment advisory clients (“group exchange orders”). As with any exchange request, the funds and their agents reserve the right to reject any group exchange order, and the funds’ agents will generally reject any group exchange order received by the funds or their agents after 1 p.m., Eastern time. In addition, MFD has agreements with certain financial intermediaries which set forth the terms and conditions under which group exchange orders may be placed by these financial intermediaries. These conditions may be more restrictive than those applicable to individual exchange orders, and may include the requirement to provide the funds or their agents with advance notice of group exchange orders.

 

Automatic Exchange Plan (not available for Class R1, Class R2, Class R3, Class R4, and Class R6 shares). If you have a balance of at least $2,000 in your account in the fund, you may participate in the automatic exchange plan, a dollar-cost averaging program. This plan permits you to make automatic periodic exchanges from your account in the fund for shares of the same class of other MFS funds. Exchanges will generally be made at net asset value without any sales charges; however, you will pay the initial sales charge, if applicable, if you have not already paid this charge on these shares.

 

Disruptive Trading

 

General Purchase and Exchange Limitation Policy. The MFS funds reserve the right to restrict, reject, or cancel, without any prior notice, any purchase or exchange order, including transactions believed to represent frequent or other disruptive trading activity. In the event that MFSC rejects or cancels an exchange request, neither the redemption nor the purchase side of the exchange will be processed. Each MFS fund reserves the right to delay for one business day the processing of exchange requests in the event that, in MFSC’s judgment, in consultation with MFS, as appropriate, such delay would be in the fund’s best interest, in which case both the redemption and purchase side of the exchange will receive the funds’ net asset values at the conclusion of the delay period.

 

Disruptive Trading Risks. To the extent that the MFS funds or their agents are unable to curtail disruptive trading practices in a fund (e.g., disruptive frequent trading) or to the extent there are large or frequent redemptions in a fund, these purchases and/or redemptions can interfere with the efficient management of the fund’s portfolio, may result in increased transaction and administrative costs, and may adversely impact the fund’s performance.

 

Frequent Trading. The fund is not intended to serve as a vehicle for frequent trading. The Board of Trustees of the fund has adopted the purchase and exchange limitation policy described below, which it believes is reasonably designed to discourage frequent fund share transactions. MFSC seeks to monitor and enforce this policy, subject to oversight by the Board of Trustees. The fund may alter its policies at any time without notice to shareholders.

 

MFSC will generally restrict, reject or cancel purchase and exchange orders into the fund if MFSC determines that an accountholder has made two exchanges, each in an amount of $15,000 or more, out of an account in the fund during a calendar quarter (“two exchange limit”). This policy does not apply to Section 529 tuition plans and MFS money market funds, or to exchanges initiated by a retirement plan trustee or sponsor rather than by a plan participant, and other similar non-discretionary exchanges (e.g., in connection with fund mergers/acquisitions/liquidations). MFSC may make exceptions to this policy if, in its judgment, the transaction does not represent frequent trading activity, such as purchases made through systematic purchase plans (but not systematic exchange plans), payroll contributions, or distribution investment programs. In applying this policy, MFSC considers the information available to it at the time and reserves the right to consider trading effected through multiple accounts that are under common ownership, control, or influence to be trading out of a single account.

 

Exchanges made on the same day in the same account are aggregated for purposes of counting the number and dollar amount of exchanges made by the accountholder (e.g., an accountholder who on the same day exchanges $16,000 from the fund into two other MFS funds, by exchanging $8,000 into each of the two MFS funds, will be viewed as having made one exchange transaction exceeding $15,000 in value).

 

Effective October 1, 2023, the two paragraphs directly above are restated in their entirety with the following two paragraphs:

 

MFSC will generally restrict, reject or cancel purchase and exchange orders into the fund if MFSC determines that an accountholder has made two exchanges, each in an amount of $25,000 or more, out of an account in the fund during a calendar quarter (“two exchange limit”). This policy does not apply to Section 529 tuition plans and MFS money market funds, or to exchanges initiated by a retirement plan trustee or sponsor rather than by a plan participant, and other similar non-discretionary exchanges (e.g., in connection with fund mergers/acquisitions/liquidations). MFSC may make exceptions to this policy if, in its judgment, the transaction does not represent frequent trading activity, such as purchases made through systematic purchase plans (but not systematic exchange plans), payroll contributions, or distribution investment programs. In applying this policy, MFSC considers the information available to it at the time and reserves the right to consider trading effected through multiple accounts that are under common ownership, control, or influence to be trading out of a single account.

 

Exchanges made on the same day in the same account are aggregated for purposes of counting the number and dollar amount of exchanges made by the accountholder (e.g., an accountholder who on the same day exchanges $26,000 from the fund into two

 

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MFS Lifetime 2040 Fund

 

other MFS funds, by exchanging $13,000 into each of the two MFS funds, will be viewed as having made one exchange transaction exceeding $25,000 in value).

 

Omnibus accounts, in which shares are held in the name of a financial intermediary on behalf of multiple underlying shareholders, are a common form of holding shares among certain financial intermediaries such as brokers, retirement plans, investment advisers, and insurance companies.

 

Financial intermediaries are required to reject any purchase or exchange orders in the fund if they believe the orders represent frequent trading activity unless they notify MFSC or an affiliate in writing that they do not monitor for frequent trading (“Waived Financial Intermediary”). With respect to Waived Financial Intermediaries, MFSC will take action reasonably designed to discourage frequent trading that is not in the best interests of the fund by the customers of such Waived Financial Intermediary, including requesting underlying shareholder account data more frequently than from other financial intermediaries.

 

With respect to omnibus accounts that provide MFSC with underlying shareholder data daily, MFSC will apply the two exchange limit directly to underlying shareholders. For all other accounts which MFSC determines are omnibus accounts, MFSC will apply the two exchange limit to the omnibus account itself. Applying the two exchange limit to the omnibus account itself will not necessarily detect violations of the two exchange limit by underlying shareholders. If the financial intermediary associated with an omnibus account that has triggered the two exchange limit demonstrates to MFSC, as determined in MFSC’s sole discretion, that no single underlying shareholder triggered the two exchange limit, then MFSC will remove any restrictions, rejections, or cancellations imposed on the account. If the financial intermediary demonstrates to MFSC that a single underlying shareholder triggered the two exchange limit and that the financial intermediary itself will apply applicable restrictions, rejections, or cancellations to that underlying shareholder, MFSC will likewise remove any restrictions, rejections, or cancellations imposed on the omnibus account. Otherwise, MFSC will continue to apply the two exchange limit to the omnibus account.

 

Certain financial intermediaries may use procedures to restrict frequent trading by their customers who invest in the fund while others may not employ any procedures to restrict frequent trading. Such procedures, if any, may be less restrictive than the fund’s purchase and exchange limitation policy, may permit transactions not permitted by the fund’s purchase and exchange limitation policy, including transactions in excess of the two exchange limit, and/or may prohibit transactions not subject to the fund’s purchase and exchange limitation policy. You should consult your financial intermediary about any restrictions it imposes on frequent trading.

 

There is no assurance that MFSC will be able to detect or prevent frequent trading. Shareholders seeking to engage in frequent trading practices may deploy a variety of strategies to avoid detection, and MFSC is generally not able to identify trading by a particular underlying shareholder within an omnibus account, which makes it difficult or impossible to determine if a particular underlying shareholder is engaged in frequent trading.

 

MFSC reviews trading activity to detect trading activity that may be indicative of frequent trading based on its internal parameters for detecting frequent trading, including reviewing transactions (including exchanges) that exceed a certain dollar amount, transactions involving similar dollar amounts, or transactions that occur close in time to other transactions in the same account or in multiple accounts that are under common ownership or influence. Any or all of these parameters (including those not listed) may change at any time. If MFSC detects suspicious trading activity at the omnibus account level, it will contact the financial intermediary to request underlying shareholder level activity to determine whether there is underlying shareholder level frequent trading that is disruptive to a fund. However, the underlying shareholder data received may not reflect information about the ultimate underlying shareholders because there may be multiple layers of omnibus accounts. If disruptive frequent trading is identified, MFSC will take appropriate action, such as requesting the financial intermediary to prohibit purchases into the account by the underlying shareholder, requiring purchases by the underlying shareholder to be submitted only by mail, or prohibiting purchases from the financial intermediary. In reviewing trading activity, MFSC may determine that certain transactions entered into for legitimate purposes do not represent frequent trading activity that is disruptive to a fund.

 

MFSC’s ability to monitor and deter frequent trading in omnibus accounts depends on, among other factors, the frequency with which MFSC requests underlying shareholder account data from omnibus accounts. MFSC expects to request underlying shareholder data based on its assessment of the likelihood of frequent trading by underlying shareholders among other factors. MFSC expects to request underlying shareholder data from Waived Financial Intermediaries more frequently than from other financial intermediaries. There is no assurance that MFSC will request data with sufficient frequency to detect or prevent frequent trading in omnibus accounts effectively.

 

Other Considerations

 

Unauthorized Transactions. MFS will not be responsible for losses that result from unauthorized transactions unless MFSC does not follow procedures reasonably designed to verify your identity. If an account has more than one owner or authorized person, MFSC will accept telephone and online instructions from any one owner or authorized person, except MFSC will require instructions for a redemption from all trustees of trust accounts registered with multiple trustees. It is important that you contact MFSC immediately about any transactions made through MFSC you believe to be unauthorized.

 

Ability to Contact MFSC. Certain methods of contacting MFSC, such as by mail, telephone, or electronically, may be unavailable or delayed (for example, after natural disasters, during periods of significant/major political, social, or economic instability, or in the event of a cybersecurity incident).

 

Unclaimed Accounts and Uncashed Checks. If your account has no activity for a certain period of time and/or mail sent to you on behalf of the fund is returned by the post office, the fund may be required to transfer your account and any assets related to uncashed checks to the appropriate state under the state’s abandoned property laws. To avoid such action, it is important to keep your account address up to date and periodically communicate with the fund, MFSC, or your financial intermediary. When a traditional IRA account is transferred to a state as abandoned property, the Internal Revenue Service considers the transfer a taxable distribution subject to federal income tax withholding and reporting. The fund and MFSC will not be liable to shareholders or their representatives for good faith compliance with abandoned property laws.

 

Reservation of Other Rights. In addition to the rights expressly stated elsewhere in this prospectus, subject to applicable rules, laws, and regulations, MFSC reserves the right to: 1) alter, add, or discontinue any conditions of purchase, redemption, service, or privilege at any time without notice; 2) freeze any account or suspend account services when MFSC has received reasonable notice (written or otherwise) of a dispute between registered or beneficial account owners or when MFSC believes a fraudulent

 

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transaction may occur or has occurred; and 3) change, impose, discontinue, or waive any fee it charges.

 

Anti-Money Laundering Restrictions. Federal law requires the fund to implement policies and procedures reasonably designed to prevent, detect, and report money laundering and other illegal activity. The fund, consistent with applicable federal law, may redeem your shares and close your account; suspend, restrict, or cancel purchase and redemption orders; process redemption requests and withhold your proceeds; and take other action if it is unable to verify your identity within a reasonable time or conduct required due diligence on your account or as otherwise permitted by its anti-money laundering policies and procedures. Any applicable CDSC will be assessed upon redemption of your shares.

 

Confirmations in Quarterly Statements. Transactions made under certain periodic investment and withdrawal programs (including reinvestment plans) will be confirmed on quarterly account statements.

 

Other Information

 

Valuation

 

The price of each class of the fund’s shares is based on its net asset value. The net asset value of each class of shares is determined each day the NYSE is open for trading as of the close of regular trading on the NYSE (generally 4:00 p.m. Eastern time). However, net asset value may be calculated earlier in emergency situations or as otherwise permitted by the SEC. Net asset value per share is computed by dividing the net assets allocated to each share class by the number of shares outstanding for that class. On days when the NYSE is closed (such as weekends and holidays), net asset value is not calculated, and the fund does not transact purchase and redemption orders. To the extent the fund’s assets are traded in other markets on days when the fund does not price its shares, the value of the fund’s assets will likely change when you will not be able to purchase or redeem shares of the fund.

 

To determine net asset value, the fund’s investments for which reliable market quotations are readily available are valued at market value, and funds in which the fund invests are generally valued at their net asset value per share. Certain short term debt instruments may be valued at amortized cost.

 

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments to MFS pursuant to the fund’s valuation policy and procedures approved by the Board of Trustees. The Board of Trustees has designated MFS as the “valuation designee” of the fund. As valuation designee, MFS will determine the fair value, in good faith, of securities and other instruments held by the fund for which market quotations are not readily available and, among other things, will assess and manage material risks associated with fair value determinations, select, apply, and test fair value methodologies, and oversee and evaluate pricing services used in valuing the fund’s investments. If MFS determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by MFS in accordance with the fair valuation policy and procedures adopted by MFS.

 

Under the fund’s valuation policy and procedures, market quotations are not considered to be readily available for debt instruments and many types of derivatives. These investments are generally valued at fair value as determined by MFS based on information from third-party pricing services or otherwise determined by MFS in accordance with its fair valuation policy and procedures. These valuations can be based on both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, spreads, and other market data.

 

In addition, investments may be valued at fair value if MFS determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as a foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. Events that occur on a frequent basis after foreign markets close (such as developments in foreign markets and significant movements in the U.S. markets) and prior to the determination of the fund’s net asset value may be deemed to have a material effect on the value of securities traded in foreign markets. Accordingly, foreign equity securities may often be valued at fair value. MFS generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost, and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment.

 

The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

 

Distributions

 

The fund intends to declare and pay any dividends to shareholders at least annually.

 

Any capital gains are distributed at least annually.

 

Distribution Options

 

The following distribution options are generally available for Class A, Class B, Class C, and Class I shares:

 

Dividend and capital gain distributions automatically reinvested in additional shares (this option will be assigned if no other option is specified);
Dividend distributions in cash; capital gain distributions automatically reinvested in additional shares;
Dividend and capital gain distributions in cash; or
Dividend and capital gain distributions automatically reinvested into the same class of shares of another MFS fund (not available for Class B shares).

 

Not all options are available for every class or every account.

 

Dividends and capital gain distributions for Class R1, Class R2, Class R3, Class R4, and Class R6 shares can only be reinvested in additional shares of the fund, except with respect to Class R6 shares, (i) certain institutional shareholders, (ii) shareholders who purchase shares through brokerage programs of certain financial intermediaries, and (iii) shareholders who purchase shares through asset-based fee programs of certain financial intermediaries may elect any of the other distribution options described above.

 

The distribution option for accounts with dividend distributions of less than $10 generally will be changed to reinvestment in additional shares of the fund. If you have elected to receive distributions in cash, and the postal service is unable to deliver

 

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checks to your address of record, or you do not respond to mailings from MFSC with regard to uncashed distribution checks, your distribution option may be converted to having all distributions reinvested in additional shares. You should contact MFSC to change your distribution option, and your request to do so must be received by MFSC before the record date for a distribution in order to be effective for that distribution. No interest will accrue on amounts represented by uncashed distribution checks.

 

Tax Considerations

 

The following discussion is very general. You are urged to consult your tax adviser regarding the effect that an investment in the fund will have on your particular tax situation, including possible foreign, state, and local taxes. This discussion does not apply to shares of the fund held through tax-advantaged accounts or by shareholders that are not “U.S. persons” under the Internal Revenue Code of 1986, as amended.

 

The fund expects to distribute substantially all of its income and gains annually. Distributions from the fund are taxable whether you receive them in cash or reinvest them in additional shares. If you buy shares when the fund has realized but not yet distributed ordinary income or capital gains, you will pay full price for the shares and then receive a portion back as a taxable distribution.

 

Any gain resulting from the redemption, sale, or exchange of your shares will generally also be subject to tax.

 

For federal income tax purposes, distributions of investment income are generally taxable as ordinary income. Taxes on distributions of capital gains are determined by how long the fund owned or is deemed to have owned the investments that generated them, rather than how long you have owned your shares. Distributions of gains from the sale of investments that the fund owned for more than one year and that are properly reported by the fund as capital gain dividends will be treated as long-term capital gains includible in net capital gain and taxed to individuals at reduced rates. Distributions of gains from the sale of investments that the fund owned for one year or less will be taxable as ordinary income. If some or all of the fund’s income derives from “qualified dividend income” and if you are an individual who meets holding period and other requirements with respect to the fund’s shares, those distributions that are properly reported by the fund as derived from qualified dividend income are taxed to you at the reduced rates applicable to net capital gains. The portion of the fund’s distributions that will be derived from qualified dividend income will increase with increased allocations to equity fund classes.

 

A 3.8% Medicare contribution tax is generally imposed on distributions paid by the fund (other than exempt-interest dividends, if any) to, and net gains recognized on the sale, redemption, exchange, or other taxable disposition of shares of the fund by certain individuals, estates, and trusts to the extent their income exceeds certain threshold amounts.

 

Investing in underlying funds could affect the amount, timing, and character of distributions from the fund, and, therefore, may increase the amount of taxes payable by shareholders.

 

Investments by the underlying funds in foreign securities may be subject to foreign withholding or other taxes, which will decrease the fund’s return on those securities.

 

If at the close of each quarter of the fund’s taxable year, at least 50% of its total assets consists of interests in other regulated investment companies, the fund will be permitted to elect to pass through to its shareholders foreign income and other similar taxes paid by the fund in respect of foreign securities it holds directly or by an underlying fund that itself is eligible to elect and so elected to pass such taxes through to shareholders. If the fund makes such election, you must include your share of those taxes in gross income as a distribution from the fund, and you will be allowed to claim a tax credit (or a deduction) for such taxes.

 

The Form 1099 that is provided to you early each year details your distributions from the fund and how they are treated for federal tax purposes, and cost basis information for shares purchased on or after January 1, 2012, that you redeemed, sold, or exchanged. Our default method for calculating cost basis is average cost basis. More information about other cost basis methods and a cost basis selection/change form are available on mfs.com. If your account is held by your financial intermediary, you must contact your financial intermediary to obtain information about available cost basis methods and cost basis elections for your account.

 

Information about the Summary Prospectus, Prospectus, and SAI

 

The summary prospectus, prospectus, and SAI for a fund provide information concerning the fund. The summary prospectus, prospectus, and SAI are updated at least annually and any information provided in a summary prospectus, prospectus, or SAI can be changed without a shareholder vote unless specifically stated otherwise. The summary prospectus, prospectus, and SAI are not contracts between the fund and its shareholders and do not give rise to any contractual rights or obligations or any shareholder rights other than any rights conferred explicitly by federal or state securities laws that may not be waived.

 

Provision of Financial Reports and Summary Prospectuses

 

The fund produces financial reports every six months and updates its summary prospectus and prospectus annually. To avoid sending duplicate copies of materials to households, only one paper copy of the fund’s annual and semiannual report and summary prospectus may be mailed to shareholders having the same last name and residential address on the fund’s records. However, any shareholder may contact MFSC (please see back cover for address and telephone number) to request that copies of these reports and summary prospectuses be sent personally to that shareholder.

 

Additional Information on Fees and Expenses and Performance

 

Fees and Expenses

 

The annual fund operating expenses shown in “Fees and Expenses” are based on annualized expenses reported during the fund’s most recently completed fiscal year, and a weighted average of the total annual fund operating expenses and the fee charged (if any) by the fund(s) in which the fund invested during the fund’s most recently completed fiscal year, expressed as a percentage of a class’ average net assets during the period. The fund invests in Class R6 shares of the underlying funds. Annual fund operating expenses have not been adjusted to reflect the fund’s current asset size. In general, annual fund operating expenses, expressed as a percentage of a class’ average net assets, increase as the fund’s assets decrease. Annual fund operating expenses will likely vary from year to year.

 

Performance Information

 

All performance information shown in the “Class A Bar Chart” and the “Performance Table” reflects any applicable fee reductions and waivers and expense reimbursements and payments in effect during the periods shown; without these, the performance would have been lower.

 

From time to time, the fund may receive proceeds from litigation settlements, without which performance would be lower.

 

23 

 

 

MFS Lifetime 2040 Fund

 

The fund commenced operations on September 29, 2005, with the offering of Class A, Class B, Class C, Class I, Class R1, Class R2, Class R3, and Class R4 shares, and subsequently offered Class R6 shares on August 29, 2016.

 

In the “Performance Table,” performance for Class R6 shares includes the performance of the fund’s Class I shares, adjusted to take into account differences in sales loads and class specific operating expenses (such as Rule 12b-1 fees), if any, for periods prior to their offering.

 

24 

 

 

MFS Lifetime 2040 Fund

 

Financial Highlights

 

The financial highlights are intended to help you understand a fund’s financial performance for the past five years. Certain information reflects financial results for a single fund share. The total returns in the financial highlights represent the rate by which an investor would have earned (or lost) on an investment in a fund (assuming reinvestment of all distributions) held for the entire period. This information has been audited by the fund’s independent registered public accounting firm, whose report, together with the fund’s financial statements, is included in the fund’s Annual Report to shareholders. The fund’s Annual Report is available upon request by contacting MFSC (please see back cover for address and telephone number). The fund’s independent registered public accounting firm is Ernst & Young LLP.

 

Class A

 

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 18.03     $ 20.33     $ 14.79     $ 16.46     $ 16.38  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.39     $ 0.94     $ 0.21     $ 0.30     $ 0.35  
Net realized and unrealized gain (loss)     (0.39 )     (1.48 )     5.86       (1.02 )     0.57  
Total from investment operations   $ 0.00 (w)   $ (0.54 )   $ 6.07     $ (0.72 )   $ 0.92  
Less distributions declared to shareholders                                        
From net investment income   $ (0.39 )   $ (0.97 )   $ (0.22 )   $ (0.30 )   $ (0.36 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (1.02 )   $ (1.76 )   $ (0.53 )   $ (0.95 )   $ (0.84 )
Net asset value, end of period (x)   $ 17.01     $ 18.03     $ 20.33     $ 14.79     $ 16.46  
Total return (%) (r)(s)(t)(x)     0.39       (3.60 )     41.38       (5.08 )     6.45  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     0.46       0.45       0.46       0.49       0.48  
Expenses after expense reductions (h)     0.25       0.25       0.24       0.24       0.24  
Net investment income (loss) (l)     2.29       4.60       1.21       1.86       2.15  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 51,443     $ 50,245     $ 56,524     $ 41,909     $ 36,747  

 

Class B

 

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 17.92     $ 20.20     $ 14.68     $ 16.34     $ 16.23  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.26     $ 0.78     $ 0.08     $ 0.17     $ 0.22  
Net realized and unrealized gain (loss)     (0.39 )     (1.48 )     5.81       (1.01 )     0.59  
Total from investment operations   $ (0.13 )   $ (0.70 )   $ 5.89     $ (0.84 )   $ 0.81  
Less distributions declared to shareholders                                        
From net investment income   $ (0.23 )   $ (0.79 )   $ (0.06 )   $ (0.17 )   $ (0.22 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (0.86 )   $ (1.58 )   $ (0.37 )   $ (0.82 )   $ (0.70 )
Net asset value, end of period (x)   $ 16.93     $ 17.92     $ 20.20     $ 14.68     $ 16.34  
Total return (%) (r)(s)(t)(x)     (0.40 )     (4.34 )     40.36       (5.80 )     5.66  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     1.21       1.20       1.21       1.24       1.23  
Expenses after expense reductions (h)     1.00       1.00       0.99       0.99       0.99  
Net investment income (loss) (l)     1.52       3.85       0.44       1.05       1.39  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 1,972     $ 2,641     $ 3,527     $ 3,577     $ 4,588  

 

25 

 

 

MFS Lifetime 2040 Fund

 

Class C

 

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 17.64     $ 19.94     $ 14.48     $ 16.13     $ 16.03  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.26     $ 0.77     $ 0.08     $ 0.16     $ 0.21  
Net realized and unrealized gain (loss)     (0.37 )     (1.46 )     5.73       (0.99 )     0.58  
Total from investment operations   $ (0.11 )   $ (0.69 )   $ 5.81     $ (0.83 )   $ 0.79  
Less distributions declared to shareholders                                        
From net investment income   $ (0.26 )   $ (0.82 )   $ (0.04 )   $ (0.17 )   $ (0.21 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (0.89 )   $ (1.61 )   $ (0.35 )   $ (0.82 )   $ (0.69 )
Net asset value, end of period (x)   $ 16.64     $ 17.64     $ 19.94     $ 14.48     $ 16.13  
Total return (%) (r)(s)(t)(x)     (0.30 )     (4.40 )     40.39       (5.79 )     5.65  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     1.21       1.20       1.22       1.24       1.23  
Expenses after expense reductions (h)     1.00       1.00       1.00       1.00       0.99  
Net investment income (loss) (l)     1.57       3.84       0.48       1.03       1.35  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 6,747     $ 7,809     $ 8,727     $ 9,202     $ 10,994  

 

Class I

  

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 18.17     $ 20.49     $ 14.91     $ 16.57     $ 16.47  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.47     $ 1.04     $ 0.28     $ 0.32     $ 0.42  
Net realized and unrealized gain (loss)     (0.42 )     (1.54 )     5.88       (1.00 )     0.55  
Total from investment operations   $ 0.05     $ (0.50 )   $ 6.16     $ (0.68 )   $ 0.97  
Less distributions declared to shareholders                                        
From net investment income   $ (0.44 )   $ (1.03 )   $ (0.27 )   $ (0.33 )   $ (0.39 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (1.07 )   $ (1.82 )   $ (0.58 )   $ (0.98 )   $ (0.87 )
Net asset value, end of period (x)   $ 17.15     $ 18.17     $ 20.49     $ 14.91     $ 16.57  
Total return (%) (r)(s)(t)(x)     0.68       (3.41 )     41.67       (4.81 )     6.75  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     0.21       0.20       0.21       0.24       0.23  
Expenses after expense reductions (h)     0.00       0.00       0.00       0.00       0.00  
Net investment income (loss) (l)     2.75       5.06       1.57       1.92       2.55  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 7,846     $ 5,129     $ 3,870     $ 1,201     $ 1,432  

 

26 

 

 

MFS Lifetime 2040 Fund

 

Class R1

 

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 17.82     $ 20.13     $ 14.61     $ 16.27     $ 16.16  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.25     $ 0.79     $ 0.05     $ 0.16     $ 0.21  
Net realized and unrealized gain (loss)     (0.37 )     (1.48 )     5.81       (1.00 )     0.60  
Total from investment operations   $ (0.12 )   $ (0.69 )   $ 5.86     $ (0.84 )   $ 0.81  
Less distributions declared to shareholders                                        
From net investment income   $ (0.23 )   $ (0.83 )   $ (0.03 )   $ (0.17 )   $ (0.22 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (0.86 )   $ (1.62 )   $ (0.34 )   $ (0.82 )   $ (0.70 )
Net asset value, end of period (x)   $ 16.84     $ 17.82     $ 20.13     $ 14.61     $ 16.27  
Total return (%) (r)(s)(t)(x)     (0.35 )     (4.36 )     40.32       (5.80 )     5.71  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     1.21       1.20       1.22       1.24       1.23  
Expenses after expense reductions (h)     1.00       1.00       1.00       1.00       0.99  
Net investment income (loss) (l)     1.46       3.90       0.29       1.01       1.32  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 3,063     $ 4,001     $ 3,965     $ 4,153     $ 4,958  

 

Class R2

 

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 17.91     $ 20.21     $ 14.70     $ 16.34     $ 16.24  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.34     $ 0.87     $ 0.16     $ 0.24     $ 0.31  
Net realized and unrealized gain (loss)     (0.38 )     (1.46 )     5.82       (0.99 )     0.57  
Total from investment operations   $ (0.04 )   $ (0.59 )   $ 5.98     $ (0.75 )   $ 0.88  
Less distributions declared to shareholders                                        
From net investment income   $ (0.34 )   $ (0.92 )   $ (0.16 )   $ (0.24 )   $ (0.30 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (0.97 )   $ (1.71 )   $ (0.47 )   $ (0.89 )   $ (0.78 )
Net asset value, end of period (x)   $ 16.90     $ 17.91     $ 20.21     $ 14.70     $ 16.34  
Total return (%) (r)(s)(t)(x)     0.14       (3.89 )     40.98       (5.30 )     6.23  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     0.71       0.70       0.72       0.74       0.73  
Expenses after expense reductions (h)     0.50       0.50       0.50       0.50       0.49  
Net investment income (loss) (l)     2.00       4.26       0.90       1.49       1.92  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 40,810     $ 44,155     $ 53,097     $ 48,086     $ 59,429  

 

27 

 

 

MFS Lifetime 2040 Fund

 

Class R3

 

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 18.02     $ 20.33     $ 14.80     $ 16.46     $ 16.37  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.39     $ 0.94     $ 0.22     $ 0.30     $ 0.36  
Net realized and unrealized gain (loss)     (0.39 )     (1.48 )     5.84       (1.01 )     0.56  
Total from investment operations   $ 0.00 (w)   $ (0.54 )   $ 6.06     $ (0.71 )   $ 0.92  
Less distributions declared to shareholders                                        
From net investment income   $ (0.39 )   $ (0.98 )   $ (0.22 )   $ (0.30 )   $ (0.35 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (1.02 )   $ (1.77 )   $ (0.53 )   $ (0.95 )   $ (0.83 )
Net asset value, end of period (x)   $ 17.00     $ 18.02     $ 20.33     $ 14.80     $ 16.46  
Total return (%) (r)(s)(t)(x)     0.39       (3.63 )     41.32       (5.02 )     6.45  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     0.46       0.45       0.46       0.49       0.48  
Expenses after expense reductions (h)     0.25       0.25       0.25       0.25       0.24  
Net investment income (loss) (l)     2.27       4.60       1.26       1.82       2.20  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 176,070     $ 171,589     $ 156,544     $ 104,521     $ 89,830  

 

Class R4

 

    Year ended  
    4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 18.26     $ 20.56     $ 14.94     $ 16.61     $ 16.51  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.43     $ 0.91     $ 0.25     $ 0.34     $ 0.39  
Net realized and unrealized gain (loss)     (0.39 )     (1.40 )     5.93       (1.02 )     0.58  
Total from investment operations   $ 0.04     $ (0.49 )   $ 6.18     $ (0.68 )   $ 0.97  
Less distributions declared to shareholders                                        
From net investment income   $ (0.43 )   $ (1.02 )   $ (0.25 )   $ (0.34 )   $ (0.39 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (1.06 )   $ (1.81 )   $ (0.56 )   $ (0.99 )   $ (0.87 )
Net asset value, end of period (x)   $ 17.24     $ 18.26     $ 20.56     $ 14.94     $ 16.61  
Total return (%) (r)(s)(t)(x)     0.64       (3.38 )     41.74       (4.84 )     6.73  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     0.21       0.20       0.22       0.24       0.23  
Expenses after expense reductions (h)     0.00       0.00       0.00       0.00       0.00  
Net investment income (loss) (l)     2.50       4.36       1.40       2.07       2.36  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 51,695     $ 41,621     $ 105,822     $ 144,006     $ 143,534  

 

28 

 

 

MFS Lifetime 2040 Fund

 

Class R6

 

    Year ended  
  4/30/23     4/30/22     4/30/21     4/30/20     4/30/19  
Net asset value, beginning of period   $ 18.24     $ 20.55     $ 14.94     $ 16.61     $ 16.51  
Income (loss) from investment operations                                        
Net investment income (loss) (d)(l)   $ 0.51     $ 1.06     $ 0.31     $ 0.36     $ 0.43  
Net realized and unrealized gain (loss)     (0.44 )     (1.52 )     5.89       (1.02 )     0.56  
Total from investment operations   $ 0.07     $ (0.46 )   $ 6.20     $ (0.66 )   $ 0.99  
Less distributions declared to shareholders                                        
From net investment income   $ (0.46 )   $ (1.06 )   $ (0.28 )   $ (0.36 )   $ (0.41 )
From net realized gain     (0.63 )     (0.79 )     (0.31 )     (0.65 )     (0.48 )
Total distributions declared to shareholders   $ (1.09 )   $ (1.85 )   $ (0.59 )   $ (1.01 )   $ (0.89 )
Net asset value, end of period (x)   $ 17.22     $ 18.24     $ 20.55     $ 14.94     $ 16.61  
Total return (%) (r)(s)(t)(x)     0.80       (3.24 )     41.92       (4.72 )     6.89  
Ratios (%) (to average net assets) and Supplemental data:                                        
Expenses before expense reductions (h)     0.07       0.06       0.08       0.10       0.10  
Expenses after expense reductions (h)     0.00       0.00       0.00       0.00       0.00  
Net investment income (loss) (l)     2.98       5.12       1.69       2.20       2.62  
Portfolio turnover     18       14       27       13       17  
Net assets at end of period (000 omitted)   $ 273,761     $ 243,550     $ 221,571     $ 77,824     $ 75,378  

 

 

(d) Per share data is based on average shares outstanding.
(h) In addition to the fees and expenses which the fund bears directly, the fund indirectly bears a pro rata share of the fees and expenses of the underlying affiliated funds in which the fund invests. Accordingly, the expense ratio for the fund reflects only those fees and expenses borne directly by the fund. Because the underlying affiliated funds have varied expense and fee levels and the fund may own different proportions of the underlying affiliated funds at different times, the amount of fees and expenses incurred indirectly by the fund will vary.
(l) The ratios and per share amounts do not include net investment income of the underlying affiliated funds in which the fund invests.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
(x) The net asset values and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

 

29 

 

 

MFS Lifetime 2040 Fund

 

Appendix A - Waivers and Reductions of Sales Charges

 

This Appendix sets forth the various circumstances in which the initial sales charge (ISC) and/or the CDSC is waived or reduced for the MFS funds’ share classes. The waivers and reductions that are applicable to your transaction depend on your financial intermediary and the type of account and transaction. Financial intermediaries may have different policies and procedures regarding the availability of ISC or CDSC waivers, which are discussed below. In all instances, it is your responsibility to notify your financial intermediary or MFSC at the time of purchase of any relationship or other facts qualifying you for sales charge waivers or reductions. For waivers and reductions not available through a particular financial intermediary, shareholders will have to purchase fund shares through another financial intermediary or directly from the fund to receive these waivers or reductions. You should contact your financial intermediary or MFSC if you have questions on the waivers and reductions that apply to your account and/or transaction type, including whether your account is maintained at an omnibus level with the fund by your financial intermediary. The following Categories of waivers and reductions apply:

 

Merrill Lynch -- If Merrill Lynch is the record owner of your shares and/or broker of record on your account and the account is maintained at an omnibus level by Merrill Lynch with the fund, Category II waivers apply.
Ameriprise Financial -- If Ameriprise Financial is the record owner and/or broker of record on your account invested in Class A shares and the account is maintained at an omnibus level by Ameriprise Financial with the fund, Category III waivers apply.
Morgan Stanley -- If Morgan Stanley is the record owner and/or broker of record on your account invested in Class A shares of the fund and the account is a Morgan Stanley Wealth Management transactional brokerage account maintained at an omnibus level by Morgan Stanley with the fund, Category IV waivers apply.
Raymond James -- If you are invested in shares of the fund through a Raymond James platform or account, or through an introducing broker-dealer or independent registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody services, and the account is maintained at an omnibus level by Raymond James with the fund, Category V waivers apply.
Janney Montgomery Scott LLC (Janney) -- If you are invested in shares of the fund through an account maintained at an omnibus level by or on behalf of Janney with the fund, Category VI waivers apply.
Edward Jones – If you are invested in shares of the fund through an Edward Jones platform or account maintained at an omnibus level by Edward Jones with the fund, Category VII waivers apply.
D.A. Davidson & Co. (D.A. Davidson) -- If you are invested in shares of the fund through a D.A. Davidson platform or account maintained at an omnibus level by or on behalf of D.A. Davidson with the fund, Category VIII waivers apply.
Baird – If you are invested in shares through a Baird platform or account maintained at an omnibus level by or on behalf of Baird with the fund, Category IX waivers apply.
All Others -- Category I waivers apply to other accounts and transactions that do not otherwise fall under Category II – IX.

 

Not all MFS funds offer each share class. In order to qualify for a sales charge waiver or reduction, you must advise MFSC or your financial intermediary that you are eligible for the waiver at the time of purchase and/or redemption. The fund, MFS, and their affiliates reserve the right to eliminate, modify, and add waivers and reductions of sales charges at any time at their discretion.

 

Shares otherwise subject to a CDSC will not be charged a CDSC in an exchange. Shares will retain the CDSC schedule in effect prior to an exchange based upon a pro rata share of the CDSC from the exchanged fund and the original purchase date of the shares subject to the CDSC. If you exchange your shares out of MFS U.S. Government Money Market Fund or MFS U.S. Government Cash Reserve Fund into Class A shares of any other MFS fund, you will pay the initial sales charge, if applicable, if you have not already paid this charge on these shares. You will not pay the initial sales charge if:

 

the shares exchanged from either MFS fund were acquired by an exchange from any other MFS fund;
the shares exchanged from either MFS fund were acquired by automatic investment of distributions from any other MFS fund; or
the shares being exchanged would have, at the time of purchase, been eligible for purchase at net asset value had you invested directly in the MFS fund into which the exchange is being made.

 

In addition, transfers, rollovers, or other transactions from an account to a second account that purchases shares of the same class of the same fund or another MFS fund will not be charged the CDSC or ISC, as applicable, provided that the redemption order from the first account and the purchase order for the second account are combined into a single order for the transfer, rollover, or other transaction, and MFSC has available to it the necessary information about the CDSC applicable to the first account. Shares will retain the CDSC schedule in effect based upon a pro rata share of the CDSC from the fund in the first account and the original purchase date of the shares subject to the CDSC. You should contact your financial intermediary or MFSC if you have questions on the sales charge waivers and reductions that apply in a transfer between accounts, including whether MFSC has the required information.

 

The CDSC may be waived from time to time pursuant to Conduct Rule 2341 of FINRA.

 

With respect to MFS Municipal Income Fund, all references to Class A shares shall also apply to Class A1 shares and all references to Class B shares shall also apply to Class B1 shares.

 

A-1 

 

 

MFS Lifetime 2040 Fund

 

WAIVERS AND REDUCTIONS

 

Financial Intermediary Category I

 

Eligible Accounts: Accounts that are not Eligible for Financial Intermediary Categories II – IX

 

As used below, the term “ESP” refers to employer sponsored plans; the term “SRO” refers to salary reduction only plans; the term “Employer Retirement Plans” includes 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans any of whose accounts are maintained by the fund at an omnibus level; the term “IRA” refers to traditional, Roth, rollover, SEP and SIMPLE IRAs; the term “ERISA” refers to the Employment Retirement Income Security Act of 1974, as amended.

 

GENERAL WAIVERS

 

    Sales Charge Waived
Waiver Category   Class A
ISC
  Class A
CDSC
  Class B
CDSC
  Class C
CDSC
A.  Distribution Reinvestment                
Shares acquired through dividend or capital gain reinvestment into the same class of the fund.        
Shares acquired by automatic reinvestment of distributions of dividends and capital gains of any MFS fund into the same class of shares of another MFS fund.        
B.  Affiliates of Funds/Certain Financial Advisers                
Shares acquired by officers, eligible directors, employees (including former employees), and agents of MFS, Sun Life Financial, or any of their subsidiary companies.        
Shares acquired by trustees and former trustees of any investment company for which MFD serves as distributor.        
Shares acquired by employees, directors, partners, officers, and trustees of any subadvisor to any MFS fund.        
Shares acquired by certain family members of any such individual identified above and their spouses (or legal equivalent under applicable state law), and certain trusts, pension, profit-sharing or other retirement plans for the sole benefit of such persons, provided the shares are not resold except to the fund which issued the shares.        
Shares acquired by employees or registered representatives (including former employees) of financial intermediaries that have a selling agreement with MFD or an employee’s spouse (or legal equivalent under applicable state law) or employee’s children under the age of 21.  For employees or registered representatives of such financial intermediaries who established an account with MFS prior to May 1, 2006, shares acquired by certain family members of employees or registered representatives of financial intermediaries and their spouses (or legal equivalent under applicable state law), and certain trusts, pension, profit-sharing or other retirement plans for the sole benefit of such persons, provided the shares are not resold except to the fund which issued the shares.        
Shares acquired by institutional clients of MFS or MFS Institutional Advisors, Inc.        
C.  Involuntary Redemptions                
Shares redeemed at a fund’s direction due to the small size of a shareholder’s account.          
D.  Investment of Proceeds From Certain Redemptions of Class I Shares                
The initial sales charge imposed on purchases of Class A shares and the contingent deferred sales charge imposed on certain redemptions of Class A shares, are waived with respect to Class A shares acquired of any MFS fund through the immediate reinvestment of the proceeds of a redemption of Class I shares of any MFS fund.            
E.  Systematic Withdrawals                
Systematic withdrawals with respect to up to 10% per year of the account value determined at the time of your first withdrawal under the plan(s) (or January 4, 2016, with respect to Class A shares, whichever is later).          

 

A-2 

 

 

MFS Lifetime 2040 Fund

 

    Sales Charge Waived
Waiver Category   Class A
ISC
  Class A
CDSC
  Class B
CDSC
  Class C
CDSC
F.  Death of Owner                
Shares redeemed on account of the death of the account owner (e.g., shares redeemed by the estate or any transferee of the shares from the estate) if the shares were held solely in the deceased individual’s name, or for the benefit of the deceased individual.          
G.  Disability of Owner                
Shares redeemed on account of the disability of the account owner if shares are held either solely or jointly in the disabled individual’s name or for the benefit of the disabled individual (in which case a disability certification form is required to be submitted to MFSC), or shares redeemed on account of the disability of the 529 account beneficiary.