Many retirement investors are not using target-date funds as intended, and may be losing out on thousands of dollars in returns, according to a study by Financial Engines and Aon Hewitt.
The study, "Help in Defined Contribution Plans: 2006 through 2012," examined the 401(k) investing behavior of roughly 725,000 workers at 14 large U.S. employers.
It found that more than 60 percent of workers who hold money in target-date funds also invest in other funds, and among that group the average allocation to target-date funds was just 35 percent. The funds are based on the investor's target retirement date and invest accordingly in a mix of stocks, bonds and cash with age-appropriate risk.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
- Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
- Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
