November 2005 
Volume 04, Issue 7 
New and Notable
 
Keeping it simple

Keeping it simple

In January, Boeing will add lifecycle funds and other new fund options to its savings plans. These changes will provide more flexibility for plan participants to customize their investment portfolios.

Lifecycle funds offer investors built-in diversification and simplify the investing process in two key ways:

• Helping individuals achieve the right mix of funds based on their goals. Many investors know that stocks can be more volatile than bonds—but may not know that a good mix of both can keep investments more stable in the long term. Lifecycle funds help take the guesswork out of developing a diversified portfolio.

• Regularly "rebalancing" investments. Many people choose their mix of funds early but don't later revisit their investments to see if the mix is still the right balance for them. With lifecycle funds, the investment professionals managing the portfolios rebalance them over time, gradually shifting to more conservative investments as a plan participant's retirement approaches.

If this simplification sounds appealing, then these types of funds may be worth investigating. Lifecycle funds are typically best for individuals who

• Want a "one-step" investing solution.

• Don't want to worry about ongoing management of their investment portfolio.

• Don't have the time, interest or knowledge to take a hands-on approach to investing.

Other people prefer to actively manage their investments and may build their own portfolios by choosing from various investment options.
More savings options

Lifecycle funds help demystify investing

The responsibility in planning for retirement. The general volatility of the stock market. Factors such as these can cause many participants in company-sponsored savings plans, such as Boeing's Voluntary Investment Plan, to fret over investment decisions. Many savers would love a simpler way to invest.

Lifecycle funds may be one answer. First introduced in the early 1990s—and scheduled to be added to Boeing's savings plans early next year—these funds offer savings plan participants a premixed, diversified portfolio. Each lifecycle fund's portfolio includes a mix of the broad asset classes to help maximize long-term growth potential—and manage risk. Participants can choose a particular fund based on their age, planned retirement date or risk tolerance, and the fund is automatically rebalanced regularly to fit the strategy. For example, lifecycle funds for people with more time until retirement are usually more aggressive to help build wealth, while funds for people nearing retirement are often more conservative, to manage wealth (for more information, see box below).

Because companies are seeing value in lifecycle funds, these funds are growing in popularity. Studies have found that more than half of all large-company 401(k) plans are offering lifecycle funds, and the list is growing each year. It's not surprising: These funds can help simplify investment decisions and can help participants better prepare for retirement.

In late October, savings plan participants received more details about the lifecycle funds and other new fund options being introduced in Boeing's plans. For information about Boeing's savings plans, visit the Boeing Savings Plans Online Web site (see below).

 

 

 

 

 

For more information

Here's how to access the Boeing Savings Plans Online Web site.

On the Boeing Web:
• Log on to https://my.boeing.com (internal Link Only)
• Click "TotalAccess." Click "My Savings & Pension," then click "Boeing Savings Plans Online."

On the World Wide Web:
• Log on to https://my-ext.boeing.com with your BEMS ID (or Social Security number) and your Boeing TotalAccess password.

 
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