Introducing Schwab Index Advantage®
For years Americans have relied on the traditional 401(k) to save for retirement, yet a recent study showed that almost 87% of traditional 401(k) participants aren't confident it will provide the income they need.1 With Schwab Index Advantage, participants may benefit from low-cost index and exchange-traded funds, third-party investment advice, and a personalized savings strategy. This unique combination is designed to help today's American workers realize a better retirement.
Why might Schwab Index Advantage be better?
Built for lower costs
By using exchange-traded funds and index mutual funds, the average 401(k) participant may realize over 70%2 savings in costs, which can amount to over $115,000 in savings over time.3
Potential for better performance
Index funds have consistently beaten the performance of actively managed funds over time. In fact, between 1998 and 2012, they outperformed actively managed funds over 83% of the time.4
Advice for each employee
Studies have shown that participants with professional help and guidance have doubled their savings rate5 and saw a 3.32% better annual return.6
Personalized approach for each employee
Schwab Index Advantage's® advice service uses 10 personal data points so participants' savings and investment strategies are based on more than their date of birth. For target-date funds, age is the only determining factor.
Higher contribution rates
Participants that used managed account services—like those in Schwab Index Advantage®—saved at a rate 3% higher than participants that used target-date funds.7
An additional fiduciary
With Schwab Index Advantage®, the managed account provider assumes fiduciary responsibility for its investment advice provided to plan participants.* In most cases under ERISA, a target-date mutual fund provider does not assume that same role.