Target date funds (TDFs) are a popular investment solution for defined contribution (DC) plans, providing a diversified, age-appropriate portfolio through a process that requires no participant input.
Russell Investments has developed Personalized Retirement Accounts (PRA), a managed account solution customized to each participant’s situation. PRA improves on the TDF advice by considering additional inputs including not just age but account balances, gender, desired retirement income, salary and savings patterns. Better solutions can be customized for each individual than is possible under the one-size-fits-all, age-based target date approach.
In this article, we look at four pre-retiree scenarios and the characteristics that drive the investment result.