May 2019

20May

US. Is Our Health Care Spending Worth It?

Many people know by now that the United States spends much more on health care than any other country, and that health outcomes are not a lot better (and in many instances worse). That raises the question: Is our health care spending actually worth it? It’s tricky to figure out the extent of the roles that the environment, genetics and social support play in improving health. Nevertheless, the best evidence tells us that health care is still very valuable,...

May 20, 2019
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17May

Lawmakers see momentum for bills promoting workplace retirement plans

As lawmakers work to put the finishing touches on legislation that would give employers new flexibility in their retirement plans, members of the Senate are looking ahead to new bills to further encourage workplace savings. Members of the Senate Finance Committee say they are hopeful about getting some version of the Retirement Enhancement and Savings Act to the president's desk this year. If the measure became law, businesses in varied industries could band together in multi-employer plans and would...

May 17, 2019
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14May

82% of Americans Are Making a Massive Retirement Planning Mistake

If you get a sinking feeling in your stomach when you think about your retirement finances, you're not alone. In fact, 75% of Americans report feeling only somewhat confident or not confident at all about their future financial health, according to a Fidelity survey . Respondents said they worry about outliving their assets, rising healthcare and living costs, and having to adjust their lifestyle to a fixed-income budget. There is a simple way to avoid this fate and to...

May 14, 2019
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13May

Uber, Lyft: Gig economy employees are facing a heightened retirement crisis

Americans are increasingly falling behind on their retirement savings, and it could be even worse for the millions working in the gig economy. Despite the overall gig economy booming with companies like Lyft (LYFT) and Uber (UBER) going public, the companies’ staunch resistance to meet drivers’ demands for full-time employment and benefits “has the potential” to worsen the retirement crisis, Chad Parks, Founder and CEO of Ubiquity Retirement + Savings told Yahoo Finance. “To the best of our knowledge,...

May 13, 2019
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13May

US. Private equity’s allure poses big risks for the stock market and its investors in the next recession

Private equity has taken center stage in active investing, and that means the stock market and its investors could face more challenges — especially in a recession. The transition is already underway and according to asset manager AllianceBernstein, won’t be ending soon. In a note to clients this week, the firm outlined an upcoming decade in which the “main expression of active investing” is in private markets. Analysts say this shift introduces potential problems. Liquidity could dry up in...

May 13, 2019
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10May

Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives

Por Leslie E. Papke I analyze the effects of state public pension parameters on the retirement of public employees. Using a panel data set of public sector workers from 12 waves of the Health and Retirement Study, I model the probability of retirement as a function of pension wealth at early and normal retirement eligibility and Social Security coverage in the public sector job. I find that becoming eligible for early retirement, or receiving an early-out offer, significantly increases the...

May 10, 2019
Articles, Pension design,
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10May

US. Retirement Savings Will Suffer When The Current Debt Bubble Bursts

People with a lot of debt keep borrowing more, aided by lower interest rates and increasingly by lenders simply ignoring prudent rules. Those lenders can then bundle the loans and sell them to investors, who may not fully understand the large financial risks that they take on. This may sound like 2007, but this is happening in 2019. The only difference is that this time it’s companies loading up on debt, not households. The phenomenon is called leveraged lending,...

May 10, 2019
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09May

Americans are saving more for retirement, but it may not be enough

The good news: Americans are saving more than they ever have for retirement. The bad news: They’ll probably need to save even more. Employees contributed an average of $2,370 per account to their 401(k) plans in the first quarter of 2019, a record level and 15% more than one year prior, according to Fidelity Investments, the Boston-based financial services firm that also manages retirement accounts. Employers also hit a record high with their own contributions to employee plans, partly...

May 9, 2019
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07May

Higher Risk Not Translating to Similar Returns for U.S. Pensions

U.S. state and local pensions have taken on riskier asset allocations in recent years, though the rate of return is paling compared with the higher risk according to Fitch Ratings in a new report. State and local pension plans have steadily increased their allocations to equities and alternatives such as real estate, private equity, hedge funds and commodities over the last several years. Asset allocation to both equities and alternative investments rose to 77% in 2017 from 67% in...

May 7, 2019
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06May

Pre-Retirement Market Volatility Looks Very Different In Retirement

There’s plenty for investors to worry about when their financial livelihood is on the line. When planning for major financial decisions such as retirement, individuals often focus on the severity of a market downturn, underestimating the impact that timing and cash flows can have on their portfolio. The sequence of returns risk is the impact the order of investment returns can have on your portfolio. As individuals move from the asset accumulation stage of their life to withdrawing assets...

May 6, 2019
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