Impediments to Saving for Retirement - The Barriers, Part 1
Today’s typical histrionic, hyperbolic headline: “Retirement Crisis: Workers Can’t Afford to Save For Retirement Due to Crippling Out of Pocket Medical Expenses and Crushing Student Debt!”1 The accurate rewrite: “Saving For Retirement is Doable – Almost All Workers Have Low, Budget-able Out-of-Pocket Medical Expenses, and Student Debts.”2 My... Read More >>
Few Read Mandatory Benefit Disclosures; Even Fewer Take Action (Reprise)
Congress has proposed that participants should pay more fees to receive yet another mandated disclosure – this time, a lifetime income estimate that participants didn’t ask for, that will almost always be inaccurate, that doesn’t apply to all retirement savings, that few will notice, even fewer will read, less still will understand, and that... Read More >>
Coincidence is not Correlation; Correlation is Not Causation
Consider: Back in 1978, New York Times sportswriter Leonard Koppett reported that you could correctly predict stock market returns based on the Super Bowl winner.1 Once there are 23 people in a room, there is a 50/50 chance that two of them will share the same birthday. Between 2000 and 2009, the divorce rate in Maine was very closely correlated... Read More >>
But I Repeat Myself - You Should Offer a Health Savings Account-Capable Health Option*
An Employee Benefits Version of Groundhog Day1 A week or so ago, in a presentation titled, Health AND Wealth in Retirement, I once again stood in front of a crowd of plan sponsors extolling the value of HSAs. HSAs offer: The most valuable benefits tax preference, Immediate and future value, An opportunity to accumulate wealthand much more! ... Read More >>
True-up, Catch-up, What's up?
“The wonderful thing about second chances is that they exist.”1 True Up – Internal Revenue Code (IRC) §§401(k) and 403(b) plans, and Health Savings Accounts (HSA) Many Individual account savings plans and some HSAs offer an employer match. Some calculate the match each payday. Some calculate the match on a cumulative, year-to-date basis. Some “... Read More >>
It is Not Borrow to Save, But Save to Borrow!
Take action now by reviewing your retirement savings plan’s liquidity provisions. To quote one benefits expert, “Borrowing to save—isn’t that something that only an oxymoron would do?”1 I agree, and I disagree. The expert suggests your workers may be incurring high-cost debt in order to participate in employer-sponsored retirement savings... Read More >>
Are your third-quarter statements out? If not, your participants may not want to wait to check out their recent investment performance. Those invested in domestic equities might be feeling flush as most U.S. market indices are at or near all-time highs.1 Many, perhaps most, individual account retirement savings plans provide for rebalancing.... Read More >>
Life is Not A Dress Rehearsal For Retirement: Start doing some of those things you are dreaming about today!
Professor Dan Ariely and Mrs. Aline Holzwarth, principal of the Center for Advanced Hindsight, both of Duke University, posted an article in the September 4, 2018 issue of the Wall Street Journal titled, “How Much You’ll Really Spend in Retirement, Probably a Lot More Than You Think.” Here are two excerpts from that article: First, in surveys,... Read More >>
Defeating Egocentric Bias - Meeting Workers Where They Are (Second of Two Articles)
In a prior blog, I noted that Laraine McKinnon, LMC17, presented at our Plan Sponsor Council of America National Conference about her book Known: How to Create a Great 401(k). My prior post focused on plan management and plan design. This time, I wanted to share Laraine’s insights into behavioral economics concepts, and to specifically discuss... Read More >>
Known: How Your 401(k) Can Make the Leap from Good to Great (First of Two Articles)
Last May, Laraine McKinnon, LMC17, presented at PSCA’s 70th Annual National Conference. Her presentation was titled: “Known: How to Create a Great 401(k)" and based on her book of the same name. The word “great” immediately triggered an allusion to Jim Collins’ seminal management text, “Good to Great: Why Some Companies Make the Leap…and Others... Read More >>