Allocating as little as 10 percent of a defined contribution plan portfolio to a mix of listed and unlisted real estate can improve the probability of successful retirement outcomes.
Probably not surprisingly, that's according to a new study released by the Defined Contribution Real Estate Council. The study, "A Path to Better Retirement Outcomes: Allocating Real Estate Assets to Retirement Portfolios," asserted that a portfolio that includes real estate — an asset that typically takes longer to sell – could help participants avoid "adverse" responses to market drops, such as selling off risky assets and exiting the market altogether after a significant downturn.
The "gradual" transition approach makes it more likely that participants will stay on course toward their goals.
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