Indexing in defined contribution plans, 2004–2012
August 16, 2013
The adoption of index target-date strategies has transformed the composition of defined contribution (DC) plans. By 2012, nearly half of all Vanguard DC plan assets were invested in passively managed options, and 1 of every 6 dollars was invested in index target-date options. This new publication from Vanguard Center for Retirement Research examines this trend and what it may mean for DC plan design moving forward.
- Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a target-date fund is not guaranteed at any time, including on or after the target date.
- All investing is subject to risk, including the possible loss of the money you invest.
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