The retirement plan provider also found nearly 83% of the participants who picked their own individual funds would have had more money if they contributed to a lifestyle fund. Additionally, the non-lifestyle participants ending account balances would have been 13.5% points higher at the end of the period had they contributed to the plan’s lifestyle option, according to a survey conducted by Burgess + Associates for Manulife USA.
Results appear to be fairly uniform over the period of the study, as lifestyle participants experienced gains in each of the risk categories. Within each risk category, lifestyle participants experienced between 2.4% to 3.9% points greater annualized returns than non-lifestyle participants. Non-lifestyle participants fared particularly poor in the growth and aggressive growth categories, where this group experienced average annual losses.
The study included 90,506 Manulife USA 401(k) plan participants divided into various lifestyle and non-lifestyle groups based on the investment risk inherent of the allocation strategies they selected.