Wealth management

In case you missed it, the East Coast has had an odd month or so with an earthquake, hurricane and flooding. In trying to find money to pay for repairs and clean up, some folks might look to their retirement plan savings as a resource. Here are the nuts and bolts of "hardship distributions."

The dot-com crash and the Great Recession have taken a serious and lasting toll on the risk appetites of Generation Y, according to the latest MFS Investing Sentiment Survey. This generation, between the ages of 18 and 30, are “investing more like their parents and grandparents, many of whom grew up in the shadows of the Great Depression,” says William Finnegan, senior managing director of U.S. retail marketing for MFS.

A new study from Fidelity Investments found that 401(k) investors who pulled out of the equities market during the 2008-2009 economic downturn experienced only 2% growth, while those who maintained their investment strategy eventually saw growth of 50% by the second quarter of this year.

With more older Americans delaying retirement to work longer and cutbacks looming in federal social insurance programs, many wonder what retirement will hold.

While there is projected to be a slight uptick in salary increases in 2012 compared to 2011, companies are continuing to place the greatest focus on variable pay, according to the U.S. Salary Increase Survey released by Aon Corporation. Aon Hewitt surveyed 1,494 large U.S. companies in June and July, which revealed a 2.9% base salary increase projection in 2012 for salaried exempt, executives, salaried nonexempt and non-union hourly workers. This is up slightly from 2011…

With employers increasingly embracing mobile app technology for delivering benefits information, more vendors are getting into the game to serve the growing market. Enter the latest, Left Coast Solutions, which has developed iJoin, an application for smartphones and other mobile devices that helps investors determine how much they need to save for retirement to replace their monthly income. …

They may long to give up their daily commutes and have wide-open schedules, but far too many baby boomers are largely unprepared to leave their jobs, according to a new report by the Insured Retirement Institute.

The U.S. Department of Labor has slightly delayed the deadlines on significant new affirmative obligations for fiduciaries of retirement plans subject to the Employee Retirement Income Security Act. Although the deadlines have been pushed back to April 1, 2012, employers should be preparing now to ensure that they are ready to comply with the new requirements. …

401(k) investors and sponsors are likely to stand up and take notice of the fees that will be clearly presented to them in April, particularly the fact that investors pay most of the administration fees. These administration fees, or expense ratios, cover not just fund management but also recordkeeping, auditing and broker commissions.

Longer life expectancies and the individual responsibility for retirement savings are combining to challenge conventional thinking and to re-shape the relationships between employers and their older employees. Individual retirement savings, primarily through 401(k) plans, are now being evaluated in terms of benefit adequacy and secure monthly income in retirement. Increasing life expectancies mean that workers must save enough to last for 20 to 30 years of retirement . . . if they retire at 65. …

[IMGCAP(1)] NEW YORK | Tue Aug 30, 2011 11:47am EDT (Reuters) - With investors falling in and out of love with Wall Street at a rapid pace, some financial advisers are finding themselves playing a new role — that of marriage counselor. In general, people don't appear to agree about one of the most critical investment decisions of their married life: How they plan to retire. Advisers say they often find themselves in the middle of financial…

401(k) participants who invested in target-date funds overwhelmingly tend to stick with these investments over time, according to new research by the nonpartisan Employee Benefit Research Institute. Just over 90% of 401(k) participants investing in TDFs in 2007 stuck with them through 2009, EBRI finds. Using a proxy for the auto-enrollment status of participants, those identified as auto-enrollees are even more likely to have stayed with TDFs, at a rate over 95%. …

This week, LIMRA reported variable annuity sales increased 19% to $80.7 billion in the six months ended June 30 compared with the same period a year earlier. Today, the Insured Retirement Institute (IRI) echoed the increase, reporting first-quarter sales at $40 billion, up 2% from $39.2 billion in the previous quarter.

The aging of the U.S. baby boom generation may slow an already weak recovery as boomers sell stocks to pay for retirement, according to research released Monday from the San Francisco Federal Reserve Bank.

Four years from now, the median account balance of a defined contribution plan assets will reach $150,000, up from $100,000 today—a decent-sized nest egg by most standards, but a far cry from the $1 million or more experts say is needed to sustain a retiree’s lifestyle and health care costs.

In light of the recent market volatility, a new report from Fidelity Investments analyzing the performance of 401(k) balances between Oct. 1, 2008 and June 30, 2011 is quite telling — giving a testimonial to the value of sticking with the stock market even amid the worst declines.

Although employers are growing more comfortable with auto-enrolling employees in a retirement plan — 40% of employers do so, statistics show — retirement income products are a relatively new frontier, and the products have yet to gain traction among plan sponsors.

Middle-income Baby Boomers, those earning between $30,000 and $74,000 are vastly underserved in terms of preparing for retirement, according to a new report from the Insured Retirement Institute, “Middle-Income Boomers and Retirement: Tapping the Significant and Underserved Middle-Income Market.”

A recent report from HSBC shows that people across the West -- including the U.S. -- are generally pessimistic about their retirement prospects while those in the East are relatively optimistic. And yet, by every objective measure, citizens in Western developed countries control significantly more assets per capita than their counterparts in Eastern emerging economies. This inconsistency begs the question: Are we ever satisfied?

The U.S. Department of Health and Human Services issued guidance on how a plan sponsor can demonstrate that it is not using reimbursements received under the Early Retiree Reinsurance Program as general revenue by maintaining the level of its contributions to the plan. Leeds & Schoner take you through the loops.