Retirement

Even before the events surrounding the U.S. debt ceiling deal and downgrade, affluent investors’ concerns about how long their retirement assets will last was rising, according to a new Bank of America Merrill Lynch survey conducted in June.

Default retirement options can be a good thing; they give employees a chance to gain benefits without having to stress over choices. But, they can also be a bad thing; not all default options fit individual employees’ long-term goals or plans.

Women are less likely than men to concentrate on financial planning, according to a new survey on financial wellbeing and health.

Despite arguments that retirees should be exposed to equities in order to bring enough growth in their portfolios to last throughout their retirement, Morningstar’s president of the investment management division, Peng Chen, argues in a new article that retirement portfolios must include a conservative bent that includes longevity-insurance products.

A Fidelity Investments survey released on July 28 found that a majority of Americans do not understand how their pensions work.

Simply stated, offering employees retirement education is the right thing to do. Retirement plans are complex and not easily understood by the average employee. More employees would participate in corporate retirement plans if they understood them better. If you are offering a 401(k) plan to your employees, but not sharing the value of the plan or how to use it properly, you aren't really committing to a solid retirement program.

The majority of employers want to prepare employees for a financially secure retirement, but have found educational campaigns unlikely to result in substantial changes in behavior. Employers walk a fine line when they implement automatic features; some argue that they enable lax saving habits and investment ignorance by funneling participants into plans automatically.

The decline in property values across most of the country, a prolonged recession, and plain old negligence and shortsightedness on the part of American workers have all combined to make retirement more a fantasy than a reality for tens of millions of baby boomers.

In case you have not noticed, there has been a flurry of regulatory activity surrounding defined contribution plans and DC advisers in particular. While there will be greater disclosure requirements, more advisers will be considered a fiduciary and it will be harder for advisers to represent a DC plan and the participants at the same time. Experienced DC advisers can use this activity to further distinguish themselves and grow their businesses.

The majority of employers want to prepare employees for a financially secure retirement, but have found educational campaigns unlikely to result in substantial changes in behavior. Employers walk a fine line when they implement automatic features; some argue that they enable lax saving habits and investment ignorance by funneling participants into plans automatically. On the other hand, Steve Utkus, director of Vanguard's Center for Retirement Research, recommends that employers use "participant inertia to their benefit and do it exclusively with plan design."