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America Doesn't Save Enough Week
This week is America Saves Week. And today, Thursday, March 1st, is “Save to Retire” day. The recommended “save to retire” actions are: “Saving now for retirement will ensure you have enough money to have a comfortable standard of living when you stop working or reduce the amount of hours you work. Participate in a work-related retirement... Read More >>
Roth Celebrates Its 20th Anniversary
How Did We Get Here? Where Are We Now? America doesn’t have a formal, stated, retirement policy. Individual Retirement Account (IRA) and employer-sponsored retirement plan provisions are creatures of our income tax system. Throughout the past 45+ years, we have seen American’s retirement savings take a back seat to federal government budget... Read More >>
Risk Exposure: Company Stock
I was somewhat surprised to see how many plans still offer Company Stock as an investment option. PSCA Survey data from 2000 showed that 39% of surveyed plans offered company stock as an investment option. Today, I was surprised to see that 18% of surveyed plans still offer company stock, and that 14% of all plan assets are invested in company... Read More >>
The Disconnect: Few Prepare for Retiree Health Needs/Expenses
Top Retiree Priority? Good Health. Largest Retiree Expense? Health Costs. Yet, only a handful of plan sponsors offer access to retiree medical coverage and funding options. According to the 2017 Merrill Lynch study titled, Finances in Retirement: New Challenges, New Solutions, today’s retirees tell us that the number one ingredient for a... Read More >>
Leaving Match on the Table? Part 2 of 2: Innovations to Make Up for Missed Opportunities.
Our just-released 60th annual PSCA survey confirms a steady increase in employer contributions over the past 10 years. Employer contributions averaged 3.8% of payroll in 2007. During the Great Recession, it dipped in 2008, 2009 and 2010 before increasing in 2011. Today, the average employer contribution is 4.8% of payroll. Those results match... Read More >>
Hardship Withdrawals - An Attractive Nuisance Becomes More Attractive
“Attractive Nuisance” – In the law of Torts, the attractive nuisance doctrine holds a landowner liable if the injury is caused by a hazardous condition that is likely to attract trespassing children or others who are unable to appreciate the risk involved. For a child, think swimming pool. For participants in a retirement savings plan, think... Read More >>
Houses and Cars and Savings, Oh My!
(Is there something wrong with workers who save up and borrow to make a major purchase?) Throughout the past few weeks, several articles highlighted workers’ retirement saving behavior and debt. For example: John Manganaro, PlanSponsor.com, “Pressing Financial Needs Derail Successful Savers,” January 16, 2018. “Survey data shows a sizable group... Read More >>
Leaving Match On The Table: Part 1 of 2 - Connecting the Dots.
Yesterday morning, I ran into three dots. Here’s how they connect (at least in my mind): A full page E*trade ad in the Wall Street Journal, page B5 on February 5, shows a burrito, wrapped in foil, with a bite taken out of it. It has the headline: "This burrito costs more than one what 1/3 of Americans have saved for retirement.” The ad does... Read More >>
Another Nobel Laureate in Economics Who Is Focused on 401(k) Plans - Part 3 of 3
In October, we focused on Richard Thaler, the 2017 Nobel Laureate in Economic Science. In December, we highlighted Franco Modigliani, the 1985 Nobel Laureate. Today, we extend our thanks and admiration to Robert Merton, the 1997 winner for his work on difficult to price investments (derivatives, options, corporations, etc.). Professor Merton... Read More >>
HSA 'Chicken' or 401(k) 'Nest Egg' - Which Comes First?
On January 4, 2018, Morningstar’s W. Scott Simon, posted an article titled “When an HSA-First Strategy Makes Sense: Why the standard advice about the sequence of contributions to a 401(k) plan and health savings account is flawed--and must-know advantages of HSAs.” (See: http://news.morningstar.com/articlenet/article.aspx?id=842764) Scott... Read More >>