EDHEC-Princeton Goal-Based Investing Index – Retirement Wealth – 2023

See the Retirement Wealth index with a Cost-of-Living Adjustment – 2023

 

This version of the EDHEC-Princeton Retirement Goal-Based Investing Indices represents the value of a dynamic strategy that aims to offer high probabilities of reaching attractive levels of wealth at retirement while securing, on an annual basis, 80% of the purchasing power in terms of retirement wealth of each dollar invested. To this end, the strategy is invested in two building blocks: the goal-hedging portfolio, which replicates the performance of the corresponding Goal Price Index, and delivers a fixed retirement wealth, and the performance-seeking portfolio, which offers the upside potential needed to reach high wealth levels with high probabilities.

The index value moves every month because of fluctuations in interest rates and in the equity market.

 

Historical values

This figure displays the values of the index and its two building blocks since January 2018. The index value is set to 1 in January 2018. The usual disclaimer applies – see the following link for more details

 

Monthly returns (%)
2018



Goal-hedging portfolio
Performance-seeking portfolio
Index
January
-1.65
5.66
1.86
February
0.17
-4.78
-2.53
March
0.44
-3.43
-1.47
April
-1.03
2.97
0.80
May
0.55
3.21
1.86
June
n.a.
n.a.
n.a.
July
n.a.
n.a.
n.a.
August
n.a.
n.a.
n.a.
September
n.a.
n.a.
n.a.
October
n.a.
n.a.
n.a.
November
n.a.
n.a.
n.a.
December
n.a.
n.a.
n.a.

Weights at last rebalancing time

This figure displays the index composition at the last rebalancing time. The goal-hedging portfolio replicates the performance of the corresponding Goal Price Index. The performance-seeking portfolio is intended to deliver upside potential to achieve aspirational goals. The usual disclaimer applies  – see the following link for more details.

 

Historical weights

This figure displays the index composition since the inception date. The usual disclaimer applies – see the following link for more details

 

Success probabilities

This figure displays the probabilities of reaching goals for the index and for a target date fund with a deterministic glide path. The essential goal is to cap the annual loss in affordable retirement wealth to 20% at most. An aspirational goal consists in reaching a higher level of retirement wealth than at the inception date; it is expressed as a multiple (130%, 150% or 200%) of the initially affordable wealth level. Probabilities are estimated by simulating 10,000 scenarios for the future values of the index and the target date fund. The usual disclaimer applies – see the following link for more details

 

Retirement Wealth Calculator

The level of replacement wealth that corresponds to a given funding ratio depends on the size of retirement savings.

Enter retirement savings here: $

Based on the latest values of the EDHEC-Princeton Goal-Price index:

A funding ratio of 130% corresponds to a retirement capital of $ 0 per year;

A funding ratio of 150% corresponds to a retirement capital of $ 0 per year;

A funding ratio of 200% corresponds to a retirement capital of $ 0 per year;

The replacement wealth is an estimate based on the values of the EDHEC-Princeton Goal Price index – Retirement Wealth – 2023. The index is itself based on a model, and it does not represent the actual price of a zero-coupon bond. Probabilities are based on the simulation of hypothetical scenarios for future asset returns and interest rates. The assumptions underlying the simulations may prove wrong ex-post.

Data download

Document download
Index construction rules

Disclaimer

 

EDHEC-Princeton Goal-Based Investing Indices
Retirement Income
May 2018 Returns (%)
Zone, Retirement year
Not adjusted
Cost-of-Living-adjusted
US, 2023
2.29
2.32
US, 2028
2.68
2.70
US, 2033
2.94
2.95
US, 2038
3.12
3.12
US, 2043
3.21
3.21
US, 2048
3.21
3.21
US, 2053
3.21
3.21
US, 2058
3.21
3.21

 

EDHEC-Princeton Goal-Based Investing Indices
Retirement Wealth
May 2018 Returns (%)
Zone, Retirement year
Not adjusted
Cost-of-Living-adjusted
US, 2023
1.86
1.86
US, 2028
2.34
2.34
US, 2033
2.79
2.79
US, 2038
3.10
3.10
US, 2043
3.21
3.21
US, 2048
3.21
3.21
US, 2053
3.21
3.21
US, 2058
3.21
3.21

 

 

 

 

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