October 2018

11Oct

Trillions in US net worth vulnerable to recession: IMF

A severe recession would slash US public wealth by about $5 trillion, causing vastly more damage to Washington's finances than just an increase in debt and deficits, the IMF warned Tuesday. Yet governments around the world, many of which face similar dangers, do not clearly publicize their overall net worths, the International Monetary Fund said in a new report. This creates a potential blind spot for policymakers who could use this knowledge to head off economic risks, it said. The global crisis...

October 11, 2018
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10Oct

A shocking number of Americans think saving for retirement ‘can wait’—here’s why money experts disagree

Nearly one in three Americans have less than $5,000 saved for retirement. Experts generally recommend trying to accumulate at least $1 million, which gets more and more difficult the longer you put off getting started. And still, an alarming number of adults think saving for retirement can wait. Student-loan provider Navient conducted a national Money Under 35 study of more than 3,000 adults, aged 22 to 35. It reports that only three in 10 respondents are saving for retirement, and...

October 10, 2018
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09Oct

US. This Chart Shows How Much Health Care Will Cost in Retirement – at Every Age

Here’s some good news about medical expenses in retirement: health care inflation has slowed over the past year, lowering your projected lifetime tab, according to a new report. And here’s the bad news: even at this lower growth rate, health care expenses are a runaway train that can plow a hole into the most carefully constructed budget. Retirement health care expenses are projected to rise at an average annual rate of 4.2%, versus an estimated 5.5% last year, according to...

October 9, 2018
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05Oct

Putin’s Russian Retirement Age Hike And U.S. Social Security

Op-Ed by Elizabeth Bauer In the news yesterday:  despite public protests on the matter, Russian President Vladimir Putin signed into law a pension reform bill which increases the retirement age, formerly age 55 for women and 60 for men, to age 60 and 65, respectively. (See Radio Free Europe for coverage.) From an American point of view, one might be surprised that the retirement age was ever this low in the first place, or that retirement ages were and still remain different for men...

October 5, 2018
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04Oct

Why Americans Are Waiting Longer Before Retiring

We're finally seeing the effects of Social Security changes made in the 1980s. Something significant is happening in Social Security: People are retiring and taking their benefits later. These trends are at least in part the consequence of policy changes made in the early 1980s that were purposefully delayed in their implementation. Consider this: In 1997, 57 percent of men claiming their retirement benefits under Social Security were 62, the earliest age at which one can do so. By 2017, that...

October 4, 2018
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03Oct

US. International Paper and Prudential Transfer $1.6 Pension Obligation

As part of the PRT agreement, Prudential will assume the responsibility for paying pension benefits to about 23,000 International Paper retirees. International Paper announced plans to settle approximately $1.6 billion of its pension obligations by purchasing a group annuity contract from The Prudential Insurance Company of America. The parties size the pension risk transfer (PRT) deal as the second-largest to take place thus far in 2018, behind a group annuity transaction between MetLife and FedEx that covered some 41,000 retirees and...

October 3, 2018
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02Oct

US. The next financial crisis will be brought on by inadequate regulation, top economist says

Economists like Johns Hopkins University's Lawrence Ball have expressed alarm over the Trump administration's efforts to roll back Obama-era regulations put in place in the wake of the 2008 crash, namely the Dodd-Frank Act. But many banking professionals believe it’s time to cast off some of Dodd-Frank’s rules, arguing that allowing lenders to provide more credit would boost the economy. Now, with a greater debt burden than in 2008, record low interest rates and highly accommodative monetary easing,...

October 2, 2018
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September 2018

28Sep

Diversification Power of Real Estate Market Securities: The Role of Financial Crisis and Dividend Policy

By Metin Ilbasmis (University of Aberdeen) Marc Gronwald (University of Aberdeen; CESifo (Center for Economic Studies and Ifo Institute)) Zhao Yuan Jun (Donghua University) This paper investigates dynamic conditional correlations between stock and REIT markets in both Turkey and the U.S. We use an Asymmetric DCC - GJR - GARCH model to estimate the dynamic conditional correlation at daily, weekly, and monthly frequencies. Our contribution is threefold. First, we find a that downward trend in the daily conditional correlation in...

September 28, 2018
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27Sep

US. Public pensions are paying higher fees for lower returns, Pew study finds

Public pension plans are spending more than $2 billion a year in fees on high-cost, risky investments to boost returns. But those bets haven't been paying off, according a report Wednesday from the Pew Charitable Trusts. The higher cost comes as public pension fund managers try to make up for a steep shortfall brought by years of underfunding and lackluster investment returns. As of fiscal 2016, the latest data available, state pension funds tracked by Pew had a combined $1.4 trillion...

September 27, 2018
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21Sep

Predicting Retirement Savings Using Survey Measures of Exponential-Growth Bias and Present Bias

By Gopi Shah Goda (Stanford University), Matthew Levy (London School of Economics & Political Science (LSE) - Department of Economics), Colleen Flaherty Manchester (University of Minnesota), Aaron Sojourner (University of Minnesota; IZA Institute of Labor Economics), Joshua Tasoff (Claremont Colleges - Claremont Graduate University) In a nationally-representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present...

September 21, 2018
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