Archive for June, 2018

2018 Retirement Trends to Watch

Wednesday, June 13th, 2018

In-plan spending strategies becoming more important

Among retirement industry trends to watch in 2018, along with how to save money in a 401(k) plan and other retirement accounts, is how to spend those savings.

A retirement industry think-tank expects a growing number of plan sponsors and industry stakeholders to evaluate retirement income solutions and de-accumulation strategies for DC plans. The expectation is that, with the growing impact on the workforce of an aging population, increased emphasis will be placed on the distribution of plan assets.

In-plan retirement income solutions will likely continue to evolve. The goal is to provide retirement plan participants with greater flexibility in how their plan assets are distributed to them. The Institutional Retirement Income Council (IRIC) believes such in-plan retirement income solutions will become a greater component of employer-sponsored financial well-being programs and that spending components should increase retirement readiness among employees.

Federal government provides guidance to offset fiduciary concerns in innovation

With the discussion of retirement income solutions as a backdrop, there is concern that innovation in these products, as well as alternative investments, could be stifled in 2018 by concerns about fiduciary risk. Some consultants may hesitate to propose innovative products to their plan sponsor clients, out of concerns about litigation. However, the U.S. Department of Labor and the Treasury Department have provided helpful fiduciary guidance that may help plan sponsors add retirement income strategies to their plans. And, legislation has been proposed that should continue to have a similar effect in supporting lifetime income options.

Another trend to watch, of course, is the impact of the new tax law. IRIC’s position is that the changes will likely provide additional savings opportunities for plan participants, and that it creates an ideal opportunity to re-think Roth features. Participants can likely benefit from additional education about Roth and how these accounts may affect their retirement readiness.

Read more about IRIC’s predictions for 2018 in this press release: https://benefitslink.com/articles/IRIC_2018Trends.pdf.

Five Money Rules to Live By

Tuesday, June 5th, 2018

It’s not simply a matter of working harder; it’s much more about using your non-financial skills and talents in new ways to bring you prosperity and a greater sense of personal satisfaction. Here are five tips to follow when seeking balance in your finances. (more…)

Jumbles of Numbers

Monday, June 4th, 2018

Without setting your life goals, saving and investing can seem like a bunch of disconnected facts and figures

For many investors, the process of monitoring progress to retirement can seem to swirl around a bunch of numbers: portfolio performance, market index returns and portfolio rebalancing percentages, to name a few.

These are important figures to keep in mind, but they miss a key critical element: how you go about defining and prioritizing your unique life goals, and then tracking your progress toward them. Here are five ways to make sure   that the numbers don’t sidetrack you from what’s really important — living the personally enriching life you have imagined for yourself.

Start with the big picture. The way you view your long-term financial picture generally can be segmented into three goal “buckets:” your needs (think housing, health care), wants (hobbies, travel) and wishes (fishing boat, new outdoor kitchen). (more…)

Attract Millennials with Values- Based Investment Options

Monday, June 4th, 2018

It isn’t surprising that average contributions are generally lower for younger 401(k) plan participants. Not only is retirement much farther down the road for them than it is for their Generation X and baby boomer colleagues, many of them struggle with more debt and less income. On average, they contribute about 5.3% of pay to their retirement plans, compared to 6.6% for Gen Xers and 8.6% for baby boomers. (more…)

Taking Advantage of the New Tax Law

Monday, June 4th, 2018

The dust hasn’t yet settled, but a few things about the new tax law seem clear. Employees will likely begin to notice a difference in their paychecks as early as February, and some projections put the average worker’s additional spendable income at about $2,000 per year.

What they will do with that income remains to be seen. While many will be tempted to improve their standard of living through purchases, you may be able to encourage them to take a longer view. As the increase in take-home pay is beginning to kick in, now could be the perfect time to point out reasons to increase retirement savings. Better yet, it might be the right time to amend the plan to allow for automatic increases in deferral amounts. (more…)

2018 Retirement Trends to Watch

Monday, June 4th, 2018

In-plan spending strategies becoming more important

Among retirement industry trends to watch in 2018, along with how to save money in a 401(k) plan and other retirement accounts, is how to spend those savings.

A retirement industry think-tank expects a growing number of plan sponsors and industry stakeholders to evaluate retirement income solutions and de-accumulation strategies for DC plans.

(more…)