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

davfordavfor
edited February 2020 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.

https://finance.yahoo.com/news/t-rowe-to-young-people-you-should-own-more-stocks-202442229.html


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