Download - Step 1: RISK TOLERANCE QUESTIONNAIRE
DIRECTIONS: For each question, select the answer that most closely corresponds to your situation, then circle the number that appears in the Score Column next to your answer. Please note that this questionnaire is only intended to be a rough guide. For guidance with your specific financial situation, you should consult a qualified tax advisor and/or investment professional.
Step 1: RISK TOLERANCE QUESTIONNAIRE
How many years until you plan on withdrawing regular income from your retirement account?
Score
A. Less than 5 years 0
B. Between 5-10 years 8
C. Between 10-15 years 17
D. Between 15-20 years 26
E. More than 20 years 35
What is the approximate loss in any one year period that you would be willing to accept before deciding to change your investments?
Score
One-year loss you would be
willing to accept
One-year return in an
exceptional year
Expected long-term annualized
returnA. > 8% 8 - 9% 4 - 5% 0
B. 11 - 15% 11 - 12% 6 - 7% 3
C. 18 - 25% 18 - 25% 8 - 9% 6
D. 28 - 32% 28 - 32% 10 - 12% 10
E. 34% & higher 34% & higher 12 - 14% 13
TOTAL SCORE (From all 6 questions):
While reviewing your retirement account statements, you discover that your account has had negative returns for several months in a row. What are you most likely to do with your account?
Score
A. I would sell all of my stock investments and move into fixed income or cash. 0
B. I would sell some of my stock investments and move into fixed income or cash. 3
C. I would not change my portfolio. 7D. I would move some of my cash and fixed income into stocks. 10
E. I would move all of my cash and fixed income into stocks. 13
How much short-term investment risk are you willing to take in order to achieve larger long-term investment returns?
Score
A. I am not willing to take any risk. 0B. I am willing to take a small amount of risk with my investments. 4
C. I am willing to take a moderate amount of risk with my investments. 8
D. I am willing to take as much risk as is needed with my investments. 13
What is your current Retirement Savings-to-Income ratio? (E.g. If you earn $50,000 annually and have $250,000 of retirement assets, then you have saved 5x your annual income.)
Score
A. Less than 1x 13
B. Between 1x-5x 10
C. Between 5x-10x 7
D. Between 10x-20x 3
E. Greater than 20x 0
If the stock market were to suffer a decline of 20% over a 3 month period, what would you do with the investments in your retirement account?
Score
A. I would sell all of my stock investments and move into fixed income or cash. 0
B. I would sell some of my stock investments and move into fixed income or cash. 3
C. I would not change my portfolio. 7D. I would move some of my cash and fixed income into stocks. 10
E. I would move all of my cash and fixed income into stocks. 13
Step 2: INVESTMENT ALLOCATION
SAMPLE ASSET ALLOCATION PROFILES
SCORE: 0 - 19 SCORE 20 - 39 SCORE 40 - 59 SCORE 60 - 79 SCORE 80 - 100
CONSERVATIVE MODERATELY CONSERVATIVE MODERATE MODERATELY
AGGRESSIVE AGGRESSIVE
SOURCE OF ANNUAL RETURNS INFORMATION: Charts are for illustrative and educational purposes only. Investments cannot be made directly into indices, which are unmanaged and do not incur any fees or expenses. Investment returns and principal values will fluctuate over time, so that an investor’s shares, when redeemed, may be worth more or less than their initial costs. Asset allocations should be rebalanced on a regular basis. Please read the prospectus carefully prior to making an investment into any mutual fund or security.
BONDS: 80%
LG CAP STOCK: 8%
SM/MID STOCK: 5%
INT’L STOCK: 4%
REAL ESTATE /ENERGY: 3% / 0%
BONDS: 60%
LG CAP STOCK: 11%
SM/MID STOCK: 7%
INT’L STOCK: 13%
REAL ESTATE /ENERGY: 7% / 2%
BONDS: 40%
LG CAP STOCK: 17%
SM/MID STOCK: 12%
INT’L STOCK: 21%
REAL ESTATE /ENERGY: 7% / 3%
BONDS: 20%
LG CAP STOCK: 16%
SM/MID STOCK: 19%
INT’L STOCK: 35%
REAL ESTATE /ENERGY: 7% / 3%
BONDS: 0%
LG CAP STOCK: 21%
SM/MID STOCK: 25%
INT’L STOCK: 45%
REAL ESTATE /ENERGY: 7% / 2%
LESS RISK / LESS RETURNS HIGHER RISK / HIGHER RETURNS
creativeplanning.net
AB401k Asset Allocation Strategies
Asset ALLOCATIONS: With Core Fund Line Up AggressiveModerately Aggressive Moderate
Moderately Conservative Conservative
Fixed IncomeIntermediate Term BondVanguard Intermediate Term Bond Index-Adm (VBILX) 0.00% 20.00% 40.00% 60.00% 80.00%
Total Fixed Income 0.00% 20.00% 40.00% 60.00% 80.00%
EquitiesBlackRock S&P 500 Index (WFSPX) 21.00% 16.00% 17.00% 11.00% 8.00%BlackRock Mid Cap Index (BRMKX) 15.00% 11.00% 8.00% 5.00% 3.00%Vanguard Small Cap Index-Admiral (VSMAX) 10.00% 8.00% 4.00% 2.00% 2.00%Blackrock International Index (BTMKX) 26.00% 21.00% 13.00% 8.00% 4.00%Vanguard Emerging Markets Stock Index (VEMAX) 19.00% 14.00% 8.00% 5.00% 0.00%
Total Equities 91.00% 70.00% 50.00% 31.00% 17.00%
SpecialtyVanguard REIT Index Admiral (VGSLX) 7.00% 7.00% 7.00% 7.00% 3.00%Vanguard Energy Fund Adm (VENAX) 2.00% 3.00% 3.00% 2.00% 0.00%Total Specialty 9.00% 10.00% 10.00% 9.00% 3.00%
Total 100.00% 100.00% 100.00% 100.00% 100.00%