Many employees are young and carrying debt related to their education. They question whether it’s better to channel income toward paying off loans or into the 401(k) plan.
Like so many other choices in life, this one is complicated.
The best answer is, of course, to do both. But you don’t want to overwhelm employees so they give up and fail to take any action. We all know (more…)
For a lot of people, gone are the days of being chained to a desk in a nine-to-five job, punching a time card in Monday through to Friday and dreading peak-hour traffic on a daily basis.
Over the last ten years there has been a lot of talk about “flexible hours”, “remote access” and “hot-desking”. There has also been a shift in the way employment demands are being met, with a lot of job seekers choosing to offer their services on a consulting [as-needed] basis rather than signing a traditional employment contract.
When expectation and reality differ, the results can be tough to take — especially when the subject is retirement. By communicating with employees in a way that recognizes both the perceptions and the realities, employers can smooth the transition from worker to retiree.
With this disconnect in mind, it’s important for employers to pay attention to key areas where worker expectations and retirement reality part ways. They may then be able to direct their communication efforts where they could truly make a difference. (more…)
With the level of market volatility that we experienced in 2018, it is possible that your preferred asset allocation may be off target. Say, for example, that your target international stock allocation is 30% of your portfolio. In 2018, your international holdings dropped to 20%, due to weakness in global markets.
To re-balance your portfolio to its original target, you would sell enough of what increased in your portfolio to restore your international holdings to 30%.9
In October 2018, the Dow Jones Industrial Average, a widely followed measure of stock-price performance of 30 of the largest U.S. companies, dropped 1,380 points in just two days. While that sounds scary, it was just a 5% move, taking the index back to mid-July 2018.
Still, you might have noticed that when your funds have been doing well, you feel pretty euphoric, but when they’re down, you feel a lot worse than the pleasure you felt when they were doing better. This is a psychological effect known as loss aversion, and it’s believed to be hard-wired in to our brains. The best way to respond to these emotional swings is to try to take emotion out of the equation altogether. Over long market cycles historically, markets have moved up, although, as always, they fall eventually. It’s that long historic sweep that you should focus on, not short-termmovements. You should also pay attention to the things you can control in investing and ignore what you cannot change. Here are a few tips to keep inmind:
There are many prescriptions to get to financial health. Here are four proven strategies to help you get there:
Setting and sticking to a budget
In 2017, 78% of Americans said they were living paycheck to paycheck, up from 75% three years earlier.1 Part of the reason may be that only 41% of us use a budget,2 even though it’s one of the best ways to keep track of where our money goes.
