Because addressing longevity risk is so important, the Day One Funds glide path starts with a 97% allocation to domestic and foreign equities, commodities, and real estate to provide potential for growth.
As the plan participant ages, equity exposure decreases.
At 10 years prior to the retirement date, we incorporate the Retirement Red Zone concept into our glide path. At this point, we begin to significantly shift from riskier assets to more conservative ones.
The target date is the approximate date when investors plan to start withdrawing their money.
Because the Day One Funds have a "through" retirement glide path, the exposure continues to decrease in retirement to provide additional protection against equity market declines. This allocation stabilizes 10 years after retirement at 26% equities, 9% commodities and real estate, and 65% fixed income.
Prudential designed its Day One Funds to help workplace plan participants prepare for retirements that could last up to 30 years or more.
• We based our asset allocation strategies on real savings rates and employer contributions for 850,000 actual plan participants.
• We incorporated our deep understanding of investing behaviors in the critical planning years of The Retirement Red Zone®.
• Our investment strategies use both traditional and non-traditional investments, such as Treasury Inflation Protected Securities, commodities, and private real estate.