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Poll: Americans sleeping better as economy recovers

June 30, 2015 Comments off

Poll: Americans sleeping better as economy recovers
Source: CreditCards.com

Losing sleep over financial stress is on the decline in the U.S., according to a new CreditCards.com poll.

A national poll commissioned by CreditCards.com found that 62 percent of adult Americans are losing sleep over at least one financial problem — 7 percentage points lower than in June 2009, the last time this poll was conducted.

Today’s most common money worry is saving enough for retirement; two in five Americans say this keeps them up at night at least occasionally. The second biggest concern is educational expenses, which trouble young adults the most.

2015 Couples Retirement Study Fact Sheet

June 26, 2015 Comments off

2015 Couples Retirement Study Fact Sheet (PDF)
Source: Fidelity

What the Study Found: Key Findings

While the majority of couples (72%) say they communicate exceptionally or very well, more than four in 10 (43%) failed to correctly identify how much their partner makes—and of that, 10% got it wrong by $25,000 or more. There were other important disconnects between couples including:

  • 36% of couples disagreed on the amount of the household’s investible assets.
  • When asked how much they will need to save to maintain their current lifestyle in retirement, nearly half (48%) have “no idea”—and 47% are in disagreement about the amount needed.
  • When asked to estimate their Social Security payout in retirement, 60% of couples either don’t know or aren’t sure. Even more disturbing: almost half (49%) of Boomers fall into this category.

T. Rowe Price: Millennial 401(K) Savers Have Better Financial Habits Than Baby Boomers

June 25, 2015 Comments off

T. Rowe Price: Millennial 401(K) Savers Have Better Financial Habits Than Baby Boomers
Source: T. Rowe Price

T. Rowe Price’s Retirement Saving & Spending Study revealed that a national sample of 1,505 millennials with 401(k)s have relatively good financial habits, particularly when compared with a national sample of 514 baby boomers with 401(k)s. While millennials are not saving at least 15% of their annual salary for retirement, as T. Rowe Price recommends, they recognize that saving for retirement is important and are interested in saving more.

More millennials than baby boomers track expenses carefully (75% vs. 64%) and stick to a budget (67% vs. 55%). And while baby boomers on average are saving a slightly higher percentage of their salary for retirement than millennials are saving, more millennials have increased their retirement savings within the past 12 months (40% vs. 21%). This suggests that they are acting in accordance with their financial priorities, as millennials ranked contributing to a 401(k) but below the match and paying down debt equally as their top priority.

How America Saves 2015

June 25, 2015 Comments off

How America Saves 2015
Source: Vanguard
Defined contribution (DC) retirement plans are the centerpiece of the private-sector retirement system in the United States. More than 90 million Americans are covered by DC plan accounts, with assets now in excess of $6.5 trillion.

Participants’ adoption of professionally managed allocations continues to grow. In 2014, 45% of all Vanguard participants had their entire account balance invested in either a single target-date fund, a single target-risk or traditional balanced fund, or a managed account advisory service. These professionally managed investment options have the potential to reshape retirement savings outcomes for these participants. They signal a shift in responsibility for investment decision-making away from the participant and back to employer-selected investment and advice programs. We predict that sometime during 2015, half of all Vanguard participants will be using a professionally managed allocation.

Reforming Government Pensions to Better Distribute Benefits: What Are the Options?

June 23, 2015 Comments off

Reforming Government Pensions to Better Distribute Benefits: What Are the Options?
Source: Urban Institute

Efforts to reform the retirement plans provided to state and local government employees are gaining momentum across the country. Yet, the debate has focused almost exclusively on the financial problems of public pension plans, drowning out a broader discussion of how well these plans serve government employees, employers, and taxpayers. This report identifies promising reform options that could more fairly distribute retirement benefits across the public-sector workforce and help governments recruit and retain productive employees. Options include revising the plan benefit formula, offering alternative plan designs, and extending Social Security coverage to all state and local government employees.

GAO — 401(K) Plans: Frequent and Collective Trading Are Uncommon and Not a Significant Concern for Plan Participants, Sponsors, or Mutual Funds

June 16, 2015 Comments off

401(K) Plans: Frequent and Collective Trading Are Uncommon and Not a Significant Concern for Plan Participants, Sponsors, or Mutual Funds
Source: Government Accountability Office

401(k) plan participants often face trading policies that restrict frequent or collective trading in mutual funds. The most common restrictions were (1) discretionary provisions found in mutual fund prospectuses that allow mutual funds to reject purchases or exchanges of mutual fund shares they find inappropriate or disruptive to the fund’s investment and management strategy and (2) time limits on how quickly a participant can purchase additional shares after trading out of a fund.

Frequent and collective trading by plan participants are uncommon. Since the market timing abuses in mutual funds of the early 2000s, neither frequent nor collective trading by participants has been a concern for plan sponsors, mutual funds, or participant advocates that GAO interviewed.

There was general agreement among industry representatives, participant advocates, and other stakeholders that GAO interviewed that current regulation strikes an appropriate balance between a participant’s ability to manage his or her retirement investments and the duty of plan fiduciaries to operate and manage their plans prudently, at low cost, and solely in the interest of participants, and the obligations of mutual funds with respect to all their investors.

Working And Retiring Abroad: Overview On Pension Rights Within The EU

May 25, 2015 Comments off

Working And Retiring Abroad: Overview On Pension Rights Within The EU
Source: European Parliamentary Research Service
All European countries are free to decide who is to be insured in their social security schemes under their national legislation, which benefits are granted and under what conditions. However, the EU provides common rules to protect citizens’ social security rights when moving within Europe (EU 28 + Iceland, Liechtenstein, Norway and Switzerland). Detailed information on these aspects is available on the European Commission webpage ‘EU Social Security Coordination’, which also includes information on ‘Your rights country by country’.

With regard to pensions for EU nationals living in a different Member State, relevant information is also available on the Your Europe dedicated webpage.

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