What the retirement gurus didn’t tell you about that ‘balanced’ portfolio
A portfolio is considered "balanced" if it has a 60/40 asset allocation, but it doesn't guarantee a "slam-dunk" performance, according to this article on MarketWatch. An analysis of the portfolio's performance over every three-year time period from 2000 to 2015 has shown that a portfolio with 60% invested in stocks and 40% bond allocation yielded a positive return 78% of the time and provided a 4% return only 66% of the time. The findings should prompt retirement investors to consider other asset allocation strategies, such as combining stocks with above-average dividends and investments that hedge the market risk of those stocks.

Source: Bloomberg
Source: Bloomberg

Roths for tax savings, no matter how much money you make
Compared with the traditional IRA, a Roth IRA is underutilized as a savings vehicle, as many people don't understand the difference between the two accounts, according to this article on CNBC. Unlike distributions from a traditional IRA, Roth withdrawals are not subject to tax, as the account is funded with after-tax dollars, enabling retirees to reduce their taxable income, keep a bigger portion of their Social Security benefits from being taxed and minimize Medicare premiums. "Roths allow you to eliminate a future tax obligation," says an expert.

Should you protect your retirement accounts? Absolutely
Creating a solid estate plan is key to protecting retirement assets from creditors, according to this article on Forbes. The Employee Retirement Income Security Act provides protection to 401(k) and other employer-sponsored retirement plans, but not to IRAs, in which case, clients should file for bankruptcy to protect their IRA assets from creditors. New York and several states have laws protecting IRAs and cash-balance pensions from creditors, provided the assets remain in the account.

Will we ever be able to retire? Boomers and Gen X-ers are worried.
Fifty-one percent of workers polled by the Addison Group voiced concern that they would be unable to retire as planned, according to this article on Washington Post. The survey shows that the retirement worry is shared by a bigger number of older workers (55% of baby boomers and 58% of Gen X-ers). Fewer millennials share the same concern, with 53% of older millennials and 61% of younger millennials saying that they are confident that they would be able to retire according to plan.

The radical fix for 401(k)s
Despite the many improvements made to 401(k) plans, a radical change is needed to give more workers access to an employer-sponsored retirement savings plan, writes an expert on Morningstar. Companies sponsoring 401(k) plans should no longer take on fiduciary duties, as they are already subject to ERISA regulations and 401(k) plans have become an important tool for retirement saving, the expert says. Instead, a national "buy list" of 401(k) suppliers should be created to make the company sponsor merely a facilitator and to ensure the features and plan costs are the same for workers from all company types, he argues.


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