New research from well-known, Boston-based money management firm GMO has an important warning for retirement savers of all ages when it comes to their glide paths (the gradual reduction in one’s allocation to equities as they get closer to – and then enter –retirement). As today’s article outlines, the research indicates that “No matter how young you are, chances are that you are too heavily invested in equities.” What is the potential flaw in how glide paths have been determined up until now – and what might more appropriate glide paths look like? CLICK HERE.
The author of today’s article likens them to an “elite Navy SEALs team of retirement savers”: those with $1 million or more in their 401(k). And after membership in this elite group decreased in the final months of last year as volatility in the stock market took its toll, the number of 401(k) millionaires ticked back up in the first quarter of this year. So what does it take to become a 401(k) millionaire? The author lays it out, noting that “even if you never join this elite group, the boot camp-like discipline its members practice can still leave you in better shape for retirement.” For more, CLICK HERE.
As the House of Representatives prepares to change hands in the new year, both the outgoing Republican chairman of the Ways and Means Committee and the presumed incoming Democratic chairman of the committee are proposing changes to retirement regulations – including changes pertaining to the risk of retirees outliving their savings. For more on these potential changes, how they could benefit retirement savers, and some of the potential issues with them, CLICK HERE.
With almost half of retirement savers having their entire account invested in a single target-date fund last year, the author of today’s article acknowledges that “Target-date funds are taking over retirement accounts” – and this may not be a good thing. He proceeds to explain how a combination of issues with target-date funds “could easily add up to 1 percent to 2 percent a year in lower returns, costing retirement savers hundreds of thousands of dollars over the course of a career.” CLICK HERE.
The stock market is rising, tax rates are falling, and the final GOP tax reform bill didn’t make dramatic changes to 401(k) contributions. All of this would seem to be good news for retirees and retirement savers. However, today’s article outlines a number of things that retirees and those approaching retirement may be wise to keep an eye on this year – including possible Medicare and Social Security cutbacks, the “double-edged sword” of higher interest rates, the elimination of Roth “do-overs”, and more. For more, CLICK HERE.
In 2013 the author of today’s article made a move that was considered irresponsible at the time and added bitcoin to the alternative investment portion of his retirement account. He then proceeded to lose half of his investment in an ensuing price drop – and called “stupid” for this investment blunder. However, he held onto his position in bitcoin and has subsequently come to view it as the best investment in his retirement account. So does bitcoin belong in retirement accounts – and are retirement savers missing out by sticking with the same old “status quo” investment options? CLICK HERE for more.
Despite concerns that the Republican tax plan would deliver a major blow to retirement savers by dramatically reducing how much they could stash away in their 401(k)s each year, that provision has not come to pass. So retirement savers can breathe a sigh of relief…right? Not necessarily. The author of today’s article warns that “while it’s good that Republicans backed off on their idea to crimp 401(k) accounts, retirees—and soon-to-be retirees—should not think they’re out of the woods. President Trump and House Speaker Paul Ryan are now proposing a new cash grab.” To read more, CLICK HERE.
There are many actions (and inactions) that can wreck retirement plans. As such, while the author of today’s article acknowledges that the $1 million figure frequently cited as how much one needs to amass for a comfortable retirement may be arbitrary, he stresses that “what is not arbitrary is it takes discipline and it requires avoiding mistakes and pitfalls to have a happy retirement.” He proceeds to identify 14 specific mistakes that retirement savers should be on guard against making – including failing to understand how Social Security works. For more, CLICK HERE.
While the primary casualty of the fiduciary rule – which began to take effect in June – is intended to be conflicts of interest on the part of financial advisers when it comes to their clients’ retirement accounts, today’s article identifies another potential casualty of the rule: the number of mutual funds offered by brokerage firms as they seek to comply with the rule. While advocates of the fiduciary rule claim that investors will benefit from this pruning of funds, others are concerned about the implications of this “less is more” approach. To read more, CLICK HERE.
A significant percentage of Americans are not saving enough (or at all) for retirement – and the U.S. government seems to be doing everything it can to exacerbate this problem. The latest example of this is the Treasury Department’s canceling of the Obama-era myRA program for individuals who did not have access to a 401(k) or other retirement plan at work. What other actions has the government taken this year that could make saving for retirement more difficult – and what are retirement savers to do in the face of this? CLICK HERE to read more.