Asset allocation models
Though it's generally recommended that you shift to a more conservative investing approach during retirement, your asset allocation still depends on your own circumstances and tolerance for risk. Ask us to help you with your choice.
While you may be tempted to invest exclusively in income-generating bonds and cash investments, keeping some money in stocks can help counteract the long-term effects of inflation. Our asset allocation models suggest ways to help balance your need for income and growth.
Your allocation will likely shift over time.
In your earlier years of retirement, your goal may be to keep a portion of your savings growing to help counteract the long-term effects of inflation. You might choose a higher percentage of stock investments. In later years, as your time horizon shortens, your risk tolerance may decline and your need for long-term growth may lessen. You might shift your portfolio toward more fixed income investments.
How you might adjust your portfolio over time.
Past performance is no guarantee of future results. Example is for illustrative purposes only.
1. Sample Allocation Portfolios
Source: Schwab Center for Financial Research with data provided by Morningstar, Inc. The return figures for 1970 through 2011 are the average, the minimum, and the maximum annual returns of the hypothetical asset allocation plans. The asset allocation plans are weighted averages of the performance of the indices used to represent each asset class in the plans, include reinvestment of dividends, and are rebalanced annually. The indices representing each asset class in the historical asset allocation plans are: S&P 500® Index (large-cap stocks); Russell 2000® Index (small-cap stocks); MSCI EAFE® Net of Taxes (international stocks); Barclays Capital U.S. Aggregate Bond Index (fixed income); and Citigroup 3-Month U.S. Treasury Bills (cash investments). CRSP 6–8 was used for small-cap stocks prior to 1979, Ibbotson Intermediate-Term Government Bond Index was used for fixed income prior to 1976, and Ibbotson 30-Day U.S. Treasury Bills were used for cash equivalents prior to 1978. Indices are unmanaged, do not incur fees or expenses, and cannot be invested in directly. Past results are not indicative of future performance.
The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. Examples provided are for illustrative (or "informational") purposes only and are not intended to be reflective of results you can expect to achieve.