Average Baby Boomer Asset Allocation vs. Target Date Fund*
Baby Boomers are generally on track with their equity holdings, but may be holding more assets in cash instead of fixed income.
**Other includes real assets (commodities and public real estate).
Sources: Wells Fargo Investment Institute, Wells Fargo Wealth and Investment Management Analytics as of 6/14/2017; and Morningstar Direct as of 6/30/2017.
- A balanced portfolio with additional exposure to fixed income and other income-generating investments, like real estate investment trusts (REITs) and dividend-paying stocks, can provide potential income for everyday expenses.
- Maintaining an equity allocation may allow an investment portfolio to keep pace with inflation.
- For qualified investors, alternative investments may help hedge assets that have accumulated over time and also provide exposure to growth opportunities.
- Don’t overlook asset location and tax-efficient investing. For example, holding growth assets in a taxable account while holding dividend stocks and bonds in retirement accounts may help mitigate tax consequences.
- Investing in bank loans and preferred stocks may potentially provide benefits in a rising-rate environment. Bank loans are often floating-rate loans, meaning their income can rise along with interest rates, while preferred stocks tend to offer higher dividend yields than common stock.
- Those who have not started estate planning may want to consider beginning the process to ensure they meet legacy objectives. Long-term care insurance may be beneficial to some investors as a way to conserve assets for estate planning.