Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Some target date funds from T. Rowe Price are now 98% stocks

edited February 15 in The Bullpen
The changing investment environment and increasing longevity risk are causing T. Rowe Price to make some changes to its target date funds formulas:
The adjustments to the so-called glide path changes the allocation for investors 30 or more years away from retirement from 90% to 98% stocks. The plans will hold the 98% constant and start the “glide path” towards lower stock exposure when an investor reaches the 30-years-to-retirement mark.

At retirement, the portfolios would have an allocation of 42.5% in stocks.

If an investor is lucky enough to live 30 years past their retirement age — potentially in their 90s — T. Rowe’s target funds would have them with 30% stocks in their portfolio, and the rest in safer investments like cash and bonds. That number in T. Rowe Price’s target-date funds now is at 20%.

The company would also add emerging markets exposure to these funds.

Sign In or Register to comment.