Abstract
Fourth-quarter 2008 market activity may serve as a painful reminder of the impact that portfolio volatility can have on investors' retirement security.In this study, T. Rowe Price analyzes the potential impact of individual stock volatility on retirement income, finding that investing in company stock may reduce an individual's projected retirement income from investments by 60%. In the example provided, a participant's annual retirement income from investments may decline from nearly $13,500 to $5,500 if the stock portion of a balanced portfolio was invested in a single stock instead of a well-diversified portfolio of large-cap stocks. Plan sponsors may wish to consider the potential negative impact of individual stock volatility on retirement income as they evaluate possible revisions to their plans, as well as future retirement plan education and communication efforts.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
