It's time to retire the traditional 401(k)

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

Investment operating expense per $10k invested:  Traditional 401(k): $65, Schwab Index Advantage: $10 to $15.

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

Learn more about potential cost savings. >

Potential for better performance

83% of the time index funds outperformed actively managed funds.

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

Learn more about index mutual funds and exchange-traded funds. >

Advice for each employee

Investment rate of return: 4.8% without advice, 7% to 11% width advice. Contribution Rate: 5% without advice, 10% with advice.

Studies have shown that participants with professional help and guidance have doubled their savings rate5 and saw a 3.32% better annual return.6

Learn more about our approach to advice. >

Personalized approach for each employee

Schwab data points: gender, marital status, state of residence, related retirement plans, employer contribution formulas, estimated social security benefits, savings rate, salary, account balance, age.  Target fund data points: age.

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.

Learn more about our personalized approach. >

Higher contribution rates

Target-date fund contribution rates: 4.4%.  Managed account contribution rates: 7.5%.

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

Learn more about the benefits of Schwab Index Advantage. >

An additional fiduciary

Shaking hand graphic

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.

Learn more about the benefits of Schwab Index Advantage. >

phoneReady to talk?

Call 877-223-7036 or contact us.