September 2017

08Sep

Annuity Options in Public Pension Plans: The Curious Case of Social Security Leveling

By Robert L. Clark, Robert G. Hammond, Melinda S. Morrill, David Vanderweide Social Security Leveling is an annuity option that allows participants to receive a level income before and after age 62. The retiree receives a larger pension benefit prior to age 62, but then the pension benefit is lowered at age 62 when the individual is expected to claim Social Security benefits. This option is not uncommon in public pension plans, yet little is known about how this option...

September 8, 2017
Aging, Articles, Pension design, Regulation, ,
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01Sep

Debt and Financial Vulnerability on the Verge of Retirement

By Annamaria Lusardi, Olivia S. Mitchell & Noemi Oggero We analyze older individuals’ debt and financial vulnerability using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). Specifically, in the HRS we examine three different cohorts (individuals age 56–61) in 1992, 2004, and 2010 to evaluate cross-cohort changes in debt over time. We also use two waves of the NFCS (2012 and 2015) to gain additional insights into debt management and older individuals’ capacity...

September 1, 2017
Aging, Articles, Labor Market, Savings, Slider-Left, , ,
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August 2017

31Aug

US. IRS loosens rules for retirement plans to lend money to Hurricane Harvey victims

The Internal Revenue Service granted additional relief to victims of Hurricane Harvey on Wednesday by allowing 401(k)s and other employer-sponsored retirement plans to give loans and hardship distributions to aid them without incurring penalties. The IRS pointed out the relief is similar to what was provided to victims of previous disasters, including Louisiana floods and Hurricane Matthew. The IRS said 401(k) plan participants, along with employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and...

August 31, 2017
News, Slider
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30Aug

US. The top 1 percent have more than 200 times the retirement savings of the typical American

When it comes to retirement savings, Americans are falling short: Most families have little or nothing stashed away. That being said, some are more prepared than others, and the wealthiest Americans have significantly more in savings. According to the Economic Policy Institute (EPI), which looked at the state of American retirement in a 2016 report, the top one percent of families had $1.08 million or more stashed away in 2013. That's 216 times the median working-age family (50th percentile), which had...

August 30, 2017
News, Slider
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29Aug

US. Pensions May Yank Up to $1 Trillion From Stocks to Trim Risk

Pension funds are poised to shift as much as $1 trillion from stocks to bonds in coming years to lock in gains and limit the potential for big losses, according to Wells Fargo & Co. “Definitely there’s a lot of money that will want to move,” said Andy Hunt, head of global credit and liability-driven investing at Wells Fargo Asset Management, predicting it will happen within roughly five years. “Best case, it’ll be between a half a trillion and a...

August 29, 2017
News, Slider
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29Aug

Pension Fund Dumps Stocks Because ‘There Is No President In The U.S.’

A $53-billion public pension fund isn't sure, so it's dumping the American stocks in its portfolio. Finland's Varma Mutual Pension Insurance Company— the country's largest pension fund— told Bloomberg it has reduced its exposure to stocks by five per cent, most of that reduction coming from U.S. stocks. "It seems as if there is no president in the U.S.," Varma CEO Risto Murto said. "If I look at what is the moral and practical power, there is no longer a traditional...

August 29, 2017
News, Slider
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25Aug

US. Health care will cost couples $275,000 in retirement

A couple retiring this year will need an estimated $275,000 to cover health care costs in retirement, according to Fidelity. That's a 6% increase over last year. Of course, it's a ballpark number. The true cost depends on a variety of factors like your health and how long you'll live. Plus, there's ongoing uncertainty about what the health care landscape will look like in the future. "No matter how you slice it, the number is brutal," said Adam Stavisky, senior vice...

August 25, 2017
News, Slider
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24Aug

US. Will the GOP destroy the 401(k)?

Republicans are ready to take on tax reform. And to make the numbers work, they may radically change the way your retirement savings are taxed. Both the Trump administration and the congressional GOP want to slash tax rates for individuals and corporations. The problem is that that strategy will lose the government money, and any bill passed by reconciliation — a procedural move in the Senate that avoids the filibuster — must be deficit-neutral over the long term. Republicans want...

August 24, 2017
News, Slider
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22Aug

US. How Far Does $1 Million Go in Retirement?

A million dollars—it has a nice ring to it. But as Dr. Evil learned after spending 30 years cryogenically preserved, it may not be enough—for many people, certainly not enough to comfortably retire on, depending on where and how long they live. A new report from GOBankingRates measures how long a million dollars would last for retirees 65 and older, state by state. It did that by multiplying the Bureau of Labor Statistics’ mean annual expenditures for that age group...

August 22, 2017
News, Slider
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18Aug

US. 401k ‘Cashout’ Craziness Continues

In May, Retirement Clearinghouse announced the National Retirement Savings Cashout Clock, a virtual clock that calculates 2017 year-to-date cashout leakage in real time from America’s defined contribution system. At the time it was announced, the clock had already registered $24.4 billion in cashouts. Since then, it’s added another $16 billion, and crossed the $40 billion mark in late July. As of this writing, $42.3 billion in cashouts have occurred thus far in 2017. If nothing happens to stem the flow,...

August 18, 2017
News
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