January 2019

27Jan

Putting the Pension Back in 401(k) Retirement Plans: Optimal versus Default Longevity Income Annuities

By Vanya Horneff (Goethe University Frankfurt - Research Center SAFE), Raimond Maurer (Goethe University Frankfurt - Finance Department), Olivia S. Mitchell (University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)) A recent US Treasury regulation allowed deferred longevity income annuities to be included in pension plan menus as a default payout solution, yet little research has investigated whether more people should convert some of the $15 trillion they hold in employer-based defined contribution plans into lifelong income streams. We investigate this...

January 27, 2019
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25Jan

Warning: Many Seniors Face Nearly Impossible Financing 30 Years Of Retirement With 40 Years Of Work

Many workers are facing a nearly impossible challenge: financing 30 years of retirement with only 40 years of work, two National Bureau of Research economists warned today. “If a couple (in their early 60s) retired today, the survivor of the couple would have about a 40 percent chance of living an additional 30 years,” Robert Clark and John Shoven said in a report to a Brookings Institute symposium on the elderly in the workplace. With the Baby Boomer...

January 25, 2019
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24Jan

Retirement? Boomers aren’t ready yet

This generation isn’t just staying in the workforce — some who left are coming back Retirement isn’t for everybody — or at least not every baby boomer. The generation closest to retirement isn’t ready to leave the workforce, according to an Express Employment Professional poll of 1,500 U.S. workers between 54 and 72 years old, conducted by Harris Poll. Some have decided to extend their careers, others are dipping their toes into retirement by shifting to part-time work and...

January 24, 2019
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21Jan

US. NYC Mayor de Blasio Proposes City-Sponsored Retirement Plan

If the federal government can’t get it done and you live in a state is slow to adopt, maybe your city will step up (what’s next, neighborhoods?). New York City Mayor Bill de Blasio recently delivered his State of the City Address. Among the proliferation of payouts Hizzoner promised in city spending was his plan to provide “retirement security for all” in a city-sponsored retirement plan. “Fewer than half of all working New Yorkers have access to a plan...

January 21, 2019
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19Jan

Retirement Savings Adequacy in U.S. Defined Contribution Plans

By Francisco Gomes (London Business School), Kenton Hoyem (Financial Engines, Inc.), Wei-Yin Hu (Financial Engines, Inc.), Enrichetta Ravina (Kellogg School of Management) We evaluate retirement savings adequacy in the U.S. using a large panel dataset comprising the contribution rates, salary, tenure, account value, plan features and asset allocations of more than 300 thousand US workers with a 401(k) account. Our simulations account for medical expenditure, longevity, and investment risks, and realistically model the likelihood of withdrawals due to hardship, job...

January 19, 2019
Adequacy, Articles, Pension design, Savings, Slider-Left, ,
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18Jan

US. The good and bad of 401(k) rollovers

"If you are moving on from your employer, shouldn't your money move on as well?" asked Peter Lazaroff at The Wall Street Journal. Rolling a 401(k) into an individual retirement account when you leave a job is an "automatic move for many investors," but there are times when it makes more sense to leave your money where it is. The most important thing to consider is expenses. It could be that your current 401(k) plan is cheaper than an...

January 18, 2019
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15Jan

US. Why The Senior Migration Trend Should Drive Better Discussions Of Longevity

I’m alarmed by the increasing interest in what I’ll call forced senior migration: that is, American seniors who move abroad in order to ensure they can live less expensively, hoping to prolong their retirement nest eggs. Writer Max Holleran Hayes recently captured this phenomenon in a thought-provoking rumination in The New Republic on Gringolandia: Lifestyle Migration Under Late Capitalism, a new book by Matthew Hayes. Essentially, he noted that many current social, political and economic policies are driving a reverse...

January 15, 2019
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11Jan

US. Small Business Employees Sorely Need Retirement Plan Coverage

LIMRA data shows nearly four in 10 workers say they began to save for retirement because their employer offered a retirement savings plan. Data shared by LIMRA shows four in 10 employers with fewer than 100 employees currently offer retirement benefits, meaning the small business employee retirement plan coverage gap remains a significant industry challenge for 2019. The LIMRA research highlights the fact that Americans’ top financial concern is affording a comfortable retirement—and that they believe access to a...

January 11, 2019
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10Jan

US. How to Prevent Market Dips From Tanking Your Retirement

For those with decades until retirement, the market’s swings are just a part of the investing process. As long as your asset allocation is in line with your risk tolerance, you can more or less sit back, ignore daily movements and turn off CNN when things get rocky. But for new retirees and those just a few years away, a tanking market is a scarier prospect.If that’s you, you need to start moving some of your assets around to a...

January 10, 2019
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08Jan

Pensions in Critical Status Fewest in Decade

The number of multiemployer pensions in critical status has fallen for the sixth straight year. The number of US multiemployer pension plans in critical status has declined for the sixth straight year, and has fallen to its lowest level since 2008, according to data from the US Department of Labor. Under federal pension law, if a multiemployer pension plan is determined to be in critical status or endangered status, the plan must provide notice to participants, beneficiaries, the bargaining parties, the...

January 8, 2019
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