1. The above example is hypothetical, based upon historical data, and provided for illustrative purposes only. The example does not represent any Franklin Templeton product or service. Individual investor results would have differed from those illustrated above. The hypothetical example is constructed by multiplying the total returns of the respective proxies by 80% equities, 20% fixed income and withdrawing the inflation annually. In addition to the 5% withdrawal, a 2.5% yearly fee is also assessed for a total annual reduction of 7.5%. Withdrawals of taxable amounts are subject to ordinary income tax and, if taken prior to age 591/2, an additional 10% federal tax may apply.
2. Projected prices were based on inflation rates of 3.33% for private colleges, 3.42% for public colleges, 1.59% for a new car, 1.18% for a gallon of milk, and 4.55% for a new home.
3. Source: Trends in College Pricing and Student Aid 2022, 1991–92 to 2022-23, Selected Years. The College Board, collegeboard.org.
4. Source: Franklin Templeton.
5. Social Security Administration. Social Security Basic Facts, December 2022 (https://www.census.gov/construction/nrs/historical_data/index.html).
6. The 2022 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. Washington, D.C., June 2, 2022. 2021, 2030 and 2040 ratios projected by the Social Security Administration in 2022.What should I know before investing?
Past performance is no guarantee of future results. Sources: Morningstar, Franklin Templeton. The equity allocation is represented by Ibbotson Associates Stocks, Bond, Bills and Inflation (SBBI) U.S. Large Stocks Index since 1926. The fixed income allocation is represented by the Ibbotson Associates Stocks, Bond, Bills and Inflation (SBBI) Investment Grade Fixed Income Securities Index since 1926. The historical inflation is represented by Ibbotson Associates Stocks, Bond, Bills and Inflation (SBBI) U.S. Inflation Index. The indexes shown are unmanaged and are not available to investors to invest in. Unmanaged index returns do not reflect any fees, expenses or sales charges.
†The above example is hypothetical, based upon historical data, and provided for illustrative purposes only. The example does not represent any Franklin Templeton product or service. Individual investor results would have differed from those illustrated above. The hypothetical example is constructed by multiplying the total returns of the respective proxies by 80% equities, 20% fixed income and withdrawing the inflation annually. In addition to the 5% withdrawal, a 2.5% yearly fee is also assessed for a total annual reduction of 7.5%. Withdrawals of taxable amounts are subject to ordinary income tax and, if taken prior to age 591/2, an additional 10% federal tax may apply.
All investments involve risk, including possible loss of principal. Equity investments generally provide an opportunity for more capital appreciation than fixed income investments, but they are subject to greater market fluctuations. Fixed income securities may be subject to extension risk, which is the risk that the issuer will repay their obligations more slowly than the market anticipates in the event that market interest rates rise. Issuers also have the right to pay their payment obligations ahead of schedule in the event that market interest rates fall, subjecting securities to prepayment risk.
Any information, statement or opinion set forth herein is general in nature, is not directed to or based on the financial situation or needs of any particular investor, and does not constitute, and should not be construed as, investment advice, forecast of future events, a guarantee of future results, or a recommendation with respect to any particular security or investment strategy or type of retirement account. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional.
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