Capital Group Introduces Target Date Withdrawal Ranges and Renames Retirement Income Funds
Capital Group has announced a new research-based framework of target date withdrawal ranges to assist retirees in converting accumulated savings into sustainable income. The initiative offers two distinct strategies: fixed dollar, inflation-indexed withdrawals (4.0% to 4.5%) for predictable spending, and variable dollar, year-end balanced approaches (5.0% to 5.5%) to mitigate the risk of asset depletion. To better align with these solutions, the firm is renaming its 2010–2025 target date funds to include 'retirement income' in their titles. This strategic shift aims to help investors and advisors navigate the transition from the savings phase to the distribution phase, accounting for market volatility, inflation, and potential Social Security fluctuations.
Topics: Retirement Planning Target Date Funds Withdrawal Strategies