Historical Returns of Retirement Plan Investment Choices
|
Investment Management Choice |
Historical Average Annual Return (AAR) |
Risk |
Expectation of Reaching Your Retirement Plan Goal * |
| Money Market |
Low |
None |
Never |
|
Do-it-Yourself (No Help) |
Low to Medium |
High |
Never |
|
Formulaic Asset Allocation (Done for you -- Life Cycle/Target Date Funds, Managed Accounts, etc.) |
Medium |
High |
Extremely Low (Only works if done for 75 years and you retire during an up-market peak) |
|
Formulaic Asset Allocation (Do-it-Yourself with Help -- Financial Engines™, Guided Choice™, web-based questionnaire models, etc.) |
Medium |
High |
Extremely Low (Only works if done for 75 years and you retire during an up-market peak) |
|
Adaptive Asset Allocation (Do-it-Yourself with Help - Horizon™) |
High |
Low |
Extremely High |
* The Retirement Plan Goal is: “To grow the value of your Retirement Plan with low risk so that you can have your final salary every year for as long as you live."