FYI: Target-date funds can improve outcomes by using relatively simple dynamic swings in their asset allocation – but the biggest improvement comes from simply saving more.
Peter Chiappinelli and Ram Thirukkonda of the Grantham, Mayo & Van Otterloo LLC asset allocation team authored the study, which examined the outcome over a 40-year period with several variations of asset allocation. The GMO study assumed an employee, who began working at age 25 at $10,000 a year, experienced annual salary increases of 1.5% until her retirement at 65. The baseline assumption was that the employee saved 6% of her salary a year, and that the company matched 50%, up to 6% of salary.
Regards,
Ted
http://www.investmentnews.com/article/20170302/FREE/170309971?template=printart
