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Ret plans - info for employees

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[Guidance Overview] IRS Retirement News for Employers, December 18, 2014 (PDF)
Topics include: Plan sponsors: [1] Set up a plan by December 31; [2] Retirement plan records; [3] Form 5500-SUP; [4] Plan check-ups -- a retirement plan needs regular care; and [5] Correcting common Roth contribution mistakes. Plan participants: [1] Types of retirement plan contributions; [2] Limit your elective deferrals to the annual amount; [3] Saver's credit; [4] IRA year-end reminders; [5] Required minimum distributions; [6] Changes to the IRA one-rollover-per-year rule. Updated: [1] Mark your calendar -- deadlines for retirement plans; [2] Updates from Department of Labor; [3] Publication 1-EP, Understanding the Employee Plans Examination Process (10-2014); [4] Publication 1020, Appeal Procedures Employee Plans Examinations (11-2014); [5] Publication 4810, Specifications for Electronic Filing of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits. (Internal Revenue Service [IRS])
What Do Plan Participants Consider When Choosing a Financial Advisor?
"[F]or nearly nine-in-ten (89 percent) of retirement plan participants, honesty and trustworthiness are the most important criteria in choosing a financial advisor. Eighty-five percent of retirement plan participants surveyed ... place the highest premium on a financial advisor's transparency and being kept in the look on what they are doing in regard to their investments. For eight-in-ten, a financial advisor's investment track record and fees or commissions charged are the most important factors in choosing an advisor. Other factors retirement plan participants consider important when choosing an advisor include having access to products from a variety of different companies (73 percent), website and online services offered (63 percent) and the renown of the financial advisor's brand or company (61 percent)." (Spectrem Group)
401(k) Tips for Job Hoppers
"Here's how to make the most of a 401(k) plan as a short-term employee: Sign up as soon as the waiting period ends.... Watch out for 401(k) match delays.... Meet savings requirements.... Don't leave before you're vested.... Simplify your accounts.... Avoid cashing out." (U.S. News & World Report)
The New Way to Measure Your 401(k)
"[I]nvestors could get a clearer picture of whether they are nearing their retirement-savings goals by focusing less on the dollar amounts they've accumulated and more on how much income that money can generate in the future. A lump-sum figure, the thinking goes, doesn't tell you much more than how well your portfolio has fared and how much you have saved. The new approach -- known as projected income -- would show instead what your current balance would pay out as income beginning at a certain age." (The Wall Street Journal; subscription may be required)
Tips on Making the Most of Your First 401(k)
"While many employers do a good job of educating their employees about how to use their plans, others do not -- or perhaps employees simply aren't listening. About 52 million Americans participated in 401(k) plans in 2012, yet many still are not saving enough for retirement or have developed bad habits, such as taking out loans that inhibit the growth of their accounts.... [Here are] tips on everything from saving enough to picking the right investments to simply taking the long view about the whole process." (Morningstar)
So You Think You're Financially Prepared to Retire? Here Are Spreadsheet Tools to Test That Assumption
"Generally [this author's focus] is to help individuals who are already retired establish an annual spending budget.... This post is aimed at individuals who are close to retirement but are unsure of whether they have sufficient financial assets to meet their needs throughout retirement.... [T]he first step ... is to determine your spending needs in retirement.... The second step ... is to determine your total expected income for a year from all sources ... This is where the spreadsheet tools available on this website come into play." (Ken Steiner, FSA Retired)
Half of Employees Approaching Retirement Wish They Had Started Saving Sooner
"More than half (52 percent) of people approaching retirement (age 55-64) say they wish they had started saving for the future sooner ... Many say they wish they had made smarter financial decisions earlier in their career, including saving more of their paycheck (47 percent) and investing their savings more aggressively (34 percent).... Forty-five percent of respondents age 55-64 say financial readiness is the most important factor in determining when they will retire.... Only 35 percent say they saved in an IRA or met with a financial advisor, 32 percent have calculated the income they would need for each year of their retirement, and 12 percent have saved in a healthcare savings account." [Also available: Executive Summary presentation slides.] (TIAA-CREF)
Millennial Workers Not Saving Enough to Receive Company Matching Contributions
"[W]hile the average participation rate of young Millennial workers (age 20-29) is 73 percent -- and slightly higher (77 percent) for older Millennials (age 30-39) -- many are saving at a low rate. Nearly 40 percent of 20-29 year olds and 31 percent of 30-39 year olds are saving at a level that is below the company match threshold." (Aon Hewitt)
[Opinion] Does Your Financial Advisor Develop Your Annual Spending Budget Based on How Much You Have and How Long You Might Live?
"In a recent survey of Financial Advisors ... 25% responded that they based their approach on levels of pre-retirement spending, 22% indicated that they used a rule of thumb like the 4% Rule, 19% indicated that they used some variation of the Bucket Strategy, 16% indicated that they compared assets with future liabilities and 18% indicated some other approach. [The survey] concluded that not enough Financial Advisors were using 'math and science' to develop spending budgets for their clients and should be periodically comparing the client's assets with the client's liability ... similar to how actuaries measure the funded status of pension plans[.]" (Ken Steiner, FSA Retired)
2014 Year-End Retirement and Distribution Planning for IRA Owners and Small Businesses
"If you turned age 70-1/2 before 2014, or hold an inherited retirement plan ... Review your records and make sure you take the full required distribution before the end of the year to avoid a 50% penalty.... If you turn age 70-1/2 in 2014 and you own an IRA: You also have a required minimum distribution due for the year 2014, but you have a choice: This first year's distribution can be postponed until as late as April 1, 2015.... Multiple individual beneficiaries of a 2013 decedent have until Dec. 31, 2014, to divide up their inherited IRA into multiple inherited IRAs, one payable to each beneficiary." (Natalie Choate, in Morningstar Advisor; free registration required)
Five Step Retirement Checkup for Plan Participants
Infographic. "The year is winding down but there's still time to remind your employees to take a look at their retirement savings programs and make changes if necessary. Share this 'Retirement Check-up' infographic with your employees to help them boost their retirement security -- while gaining more appreciation for their total benefits offering." (Fidelity Investments)
Is Outliving Retirement Savings a Fate Worse Than Death?
"A new survey from Wells Fargo shows 22 percent of people say they would rather die early than not have enough cash to live comfortably in retirement.... [Another survey] of people in their late 40s found 77 percent worried more about outliving their money in retirement than death itself. Of that survey's respondents, those who are married with dependents are even more terrified, with 82 percent saying that running out of cash is a more chilling prospect than death." (Financial Advisor)
Saving for Retirement: The Benefit of Saving Early and the Cost of Delay
"A worker putting off saving until age 35 would need to save more than 16% of income annually to produce the same potential retirement income at age 65 as someone who started saving at the 10% rate beginning at age 30; starting at age 40 would require saving more than 26% of income." (Insured Retirement Institute [IRI])
[Official Guidance] Text of IRS Announcement 2014-32: Application of One-Per-Year Limit on IRA Rollovers (PDF)
"This announcement is intended to address certain concerns that have arisen since the release of Announcement 2014-15. The IRS will apply the Bobrow interpretation of Section 408(d)(3)(B) for distributions that occur on or after January 1, 2015. This means that an individual receiving an IRA distribution on or after January 1, 2015, cannot roll over any portion of the distribution into an IRA if the individual has received a distribution from any IRA in the preceding 1-year period that was rolled over into an IRA. However, as a transition rule for distributions in 2015, a distribution occurring in 2014 that was rolled over is disregarded for purposes of determining whether a 2015 distribution can be rolled over under Section 408(d)(3)(A)(i), provided that the 2015 distribution is from a different IRA that neither made nor received the 2014 distribution. In other words, the Bobrow aggregation rule, which takes into account all distributions and rollovers among an individual's IRAs, will apply to distributions from different IRAs only if each of the distributions occurs after 2014.... [A] rollover between an individual's Roth IRAs would preclude a separate rollover within the 1-year period between the individual's traditional IRAs, and vice versa.... The one-rollover-per-year limitation also does not apply to a rollover to or from a qualified plan (and such a rollover is disregarded in applying the one-rollover-per-year limitation to other rollovers), nor does it apply to trustee-to-otrustee transfers.... IRA trustees are encouraged to offer IRA owners requesting a distribution for rollover the option of a trustee-to-trustee transfer from one IRA to another IRA." (Internal Revenue Service [IRS])
[Guidance Overview] IRS Clarifies Application of One-Per-Year Limit on IRA Rollovers, Allows Owners of Multiple IRAs a Fresh Start in 2015 (PDF)
"In Announcement 2014-32, posted [November 10, 2014] the IRS made clear that the new interpretation will apply beginning Jan. 1, 2015, and said that a distribution from an IRA received during 2014 and properly rolled over (normally within 60 days) to another IRA, will have no impact on any distributions and rollovers during 2015 involving any other IRAs owned by the same individual. This will give IRA owners a fresh start in 2015 when applying the one-per-year rollover limit to multiple IRAs. Although an eligible IRA distribution received on or after Jan. 1, 2015 and properly rolled over to another IRA will still get tax-free treatment, subsequent distributions from any of the individual's IRAs (including traditional and Roth IRAs) received within one year after that distribution will not get tax-free rollover treatment. As [this] guidance makes clear, a rollover between an individual's Roth IRAs will preclude a separate tax-free rollover within the 1-year period between the individual's traditional IRAs, and vice versa." (Internal Revenue Service [IRS])
How Effective Is the Social Security Statement? Informing Younger Workers About Social Security
"This article briefly describes the development and implementation of the Social Security Statement; discusses the Gallup surveys conducted in 1998 and 2001; and uses data from those surveys to compare, for workers aged 46 or younger, knowledge about Social Security before and after receipt of the Social Security Statement." (Barbara A. Smith and Kenneth A. Couch, via SSRN)
The 4% Spending Rule, 20 Years Later
"Many of the published studies show simulated outcomes using benchmark returns as a proxy, with no consideration of real-life costs such as taxes and investment fees.... For a moderate investor, the success rates drop from 84% to 74% when higher costs are used. What this means is that the risk moved from a 16% chance of running out of money to 26%, and the sole factor was investment costs, which is one of the main things that investors can control!" (Vanguard)
Retirement Planning: Half of You Answered 'No' to This Critical Question
"[A] recent Pew Research Center survey shows that the majority of people of all ages -- and more than 86% of young people -- believe that Social Security will pay either reduced or even no benefits when they retire.... A recent Bureau of Labor Statistics study reported that only 48% of people who worked in the private sector participated in an employee retirement plan. Let that sink in for a minute. Of the approximately 117 million private-sector workers in the U.S., potentially up to 61 million don't participate in a retirement plan through their work." (Motley Fool)
Six Key Reasons Why Investing in a Taxable Account Is Underrated
"[I]nvesting via a taxable account can be a sensible maneuver ... most investors should simultaneously fund their taxable and tax-sheltered accounts, and the current tax and interest-rate environment make saving in a taxable account particularly sensible.... [1] Extreme flexibility.... [2] Near-tax-free compounding if you plan carefully.... [3] You can use tax losses to reduce your tax bill.... [4] You may be able to enjoy no- or low-tax withdrawals.... [5] You'll have more control over your tax bill in retirement.... [6] Your heirs will receive a step-up in basis." (Christine Benz, for Morningstar)
Text of District Court Opinion: Wife's Claim for Share of Husband's Retirement Plan Was Included in Her Bankruptcy Estate Because Not Reduced to a QDRO at Time of Bankruptcy Filing (PDF)
"As part of his divorce complaint, [the husband] requested equitable distribution of their marital property ... [A]t the time Appellant filed her bankruptcy petition, no final state court order had been entered related to any of the matters raised in the complaint and counterclaim in the divorce action.... Pursuant to the Bankruptcy Code, ... [a] debtor may exempt 'retirement funds' if they are in an 'account that is exempt from taxation' under certain enumerated provisions of the Internal Revenue Code.... Appellant does not qualify for the claimed exemptions." [Urmann v. Walsh, No. 14-718 (W.D. Pa. Oct. 24, 2014)] (United States District Court for the Western District of Pennsylvania)
Do I Have a Required Distribution From My IRA This Year?
"We are down to the last two months of the year. It is time for those who have required minimum distributions (RMDs) from a retirement plan to make sure that those distributions are taken.... [1] Individuals age 70-1/2 or older by December 31 of the year.... [2] Individuals who have set up a 72(t) distribution plan.... [3] Beneficiaries of all retirement accounts.... [4] Deceased account owners." (Slott Report)
[Official Guidance] Text of 2014 IRS Form 4972, Tax on Lump-Sum Distributions, with Instructions (PDF)
Applies to lump-sum distributions from qualified retirement plans of participants born before January 2, 1936. Form 4972 for prior years is also available on the IRS website. (Internal Revenue Service [IRS])
Roth vs. Regular 401(k): Doing the Math
"From the point of view of plan participants and plan sponsors, Roth math can be a little confusing. For some participants, Roth contributions will produce greater benefits (net of taxes) than regular contributions. For others, they produce smaller benefits. Which outcome applies often depends on the participant's marginal tax rate when the contribution is made and when it is distributed." (October Three Consulting)
Majority of Parents Provide Financial Support to Their Adult Children -- Less Available for Retirement Piggybank?
"A new LIMRA Secure Retirement Institute study finds that 6 in 10 American parents provide financial support to their adult children, which could undermine their retirement readiness.... 7 in 10 U.S. households with adult children have at least one adult child living at home. Nearly three quarters of households with adult children ages 18-22 have at least one adult child residing in their home." (LIMRA)
[Official Guidance] Table of PBGC Maximum Monthly Annuity Guarantees, Pension Benefits
"Your maximum guaranteed amount is based, in part, on your age on the plan termination date (or the date the sponsor entered bankruptcy, if applicable) or, if you were not in pay status on that date, the date you begin receiving benefits from PBGC. Your maximum guaranteed amount also will reflect the age of your designated beneficiary if your benefit provides payments to a survivor. The age reduction does not apply for certain disabled participants (see Guarantees for Disabled Participants). The tables show the maximum guarantee, by age, for a participant receiving a straight-life annuity (one with no survivor benefits) and for one who receives a joint and 50% survivor annuity." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] PBGC Announces Maximum Insurance Benefit Level for 2015
"The Pension Benefit Guaranty Corporation announced [on Monday, Oct. 25] that the annual maximum guaranteed benefit for a 65-year-old retiree in a single-employer plan has increased to $60,136 for 2015, up from $59,318 for 2014. The increase is not retroactive; payments to retirees whose plans terminated before 2015 will not change. The guarantee for multiemployer plans has not changed.... The limits ... represent the cap on what PBGC guarantees, not on what PBGC pays. In some cases, PBGC pays benefits above the guaranteed amount. Whether that happens depends on the retiree's age and how much money was in the plan when it terminated." (Pension Benefit Guaranty Corporation [PBGC])
Your Roth IRA Calculator May Be Lying to You
"How many people, after running such a calculation and determining it was advisable to opt for the traditional IRA, actually put aside the amount of money they would have used to pay the tax on the conversion and invest it in a similar manner? Would/do you? Each and every year?" (Slott Report)
Five Things to Tell 401(k) Participants About Volatile Markets
"Plan Sponsors and their investment advisors should help participants remain calm during these periods of intense market fluctuations by sharing the following: Don't stop contributing.... Don't make significant changes in your account.... There is always help.... Stick with your plan.... Volatile markets do not last forever." (Lawton Retirement Plan Consultants)
Relief Under FRCP Rule 60 Unavailable to Plaintiff Who Lost on Motion to Dismiss State Law Claim for Negligent Misrepresentation (PDF)
"Arguments that the court misapplied the law or misunderstood a party's position are properly brought under Rule 59(e), but do not justify relief under Rule 60(b) ... And a party may not use a Rule 60(b) motion to raise arguments that he could have raised earlier.... In essence, plaintiff contends that defendant is not a fiduciary and that the court improperly assumed or found that she was." [Lebahn v. Owens, No. 14-1001-CM (D. Kan. Oct. 10, 2014) (U.S District Court for the District of Kansas)
Financial Wellness Is Impossible to Achieve Without Plan Participation
"[E]mployers need to clearly communicate the true 'cost' of participation. Employees need to see their out-of-pocket costs expressed as dollar amounts, not just concepts.... Next, employers need to lay out the benefits of participation over time. The objective here is to try to expand the employee's concept of long term planning and tangibly demonstrate the accumulation of wealth over time." (Employee Fiduciary)
Retirement Planning: Think Outside the Pie Chart
"Other assets, such as human capital, real estate, and pensions (such as Social Security retirement benefits) often represent a significant portion of an individual's total wealth. These assets, however, are often ignored by practitioners when building portfolios, despite the fact that they share common risks with financial assets. In this article, [the authors] explore how incorporating human capital, housing wealth, and pensions into a portfolio optimization can help build more efficient portfolios for investors." (Morningstar)
If You Really Have to Touch Your Retirement Stash, Here's How to Do It Right
"Gone are the days when it was considered taboo, or even unusual, to consider touching one's 401(k) before retirement.... Here are five questions to ask yourself before deciding whether -- or how -- to start raiding your 401(k). [1] What's the tax hit on a 401(k) loan compared with a withdrawal? ... [2] If I choose a withdrawal, can I avoid some of the tax penalties? ... [3] Am I feeling solid in my job? ... [4] Will I mind my account in a slow lane for six months or more? ... [5] Do I have an IRA alternative?" (The Wall Street Journal; subscription may be required)
Considering a 401(k) Loan? Weigh Your Options Before Borrowing
"Over the past year alone, more than 27,000 investors took loans specifically for the purchase of a home. While it's a small percentage of Fidelity's overall 401(k) loan-taking population, it is a trend the company has seen increasing over the past five years. Today's average home loan is $23,500, far higher than the average general loan value of $9,100. It represents 25 percent of an average borrower's 401(k) pre-loan balance, versus 17 percent for a general loan." (Fidelity)
Are Women and Men Different When It Comes to Retirement Plan Savings?
"[W]omen demonstrate an inclination toward savings -- they are 10% more likely to enroll in their workplace saving plans than men. And once enrolled, women across all income levels save at rates anywhere from 6% to 12% higher than those of their male counterparts." (Vanguard)
After-Tax Money in Retirement Plans: Five Questions for Employees After IRS Notice 2014-54
"Aren't after-tax contributions the same as Roth contributions? ... Do all plans allow for after-tax contributions? ... Do the same contribution limits that apply to pre-tax and Roth salary deferrals also apply to after-tax contributions? ... Do the same distribution rules that apply to pre-tax and Roth salary deferrals apply to after-tax contributions? ... If I have after-tax funds in my employer plan, how does IRS Notice 2014-54 impact me?" (Slott Report)
Can You Contribute to a Roth 401(k) and Roth IRA in the Same Year?
"Maybe. Participation in an employer plan does not disqualify you from contributing to an IRA or a Roth IRA ... [T]he question is not whether or not you can make the [IRA] contribution, but whether or not you can deduct the contribution.... If you make a non-deductible contribution, be sure you file Form 8606 with your tax return to tell IRS that you have made an after-tax contribution. Otherwise, when you go to take the funds out, you will be taxed again." (Slott Report)
Four Ways Your 401(k) Participants Can Save More
"Many studies ... indicate that workers should save at least 12% to 15% of their income each year. It is likely that most of your 401(k) plan participants are not saving anything near this amount.... [Here] are four ideas on your 401(k) plan participants could save more: Make a budget ... Raise your 401(k) savings rate with each salary increase.... Collect the full company match.... Invest appropriately for your age and risk tolerance." (Lawton Retirement Plan Consultants)
More Americans Interested In Seeking Financial Advice
"[T]wo-thirds of Americans who have received financial advice feel optimistic about their finances, and 86 percent act on financial advice after they receive it. Sixty-two percent of respondents report changing their spending habits after receiving financial advice, and 46 percent increased the amount they contribute to their retirement." (TIAA-CREF)
Reviewing Retirement Plan Tablet Apps
"Tablet-optimized apps, although uncommon, are an effective and convenient way for participants to access their pertinent retirement account information and related educational content. Each of the three account-specific tablet apps [reviewed by the authors] provides participants with three key data points -- total plan balance, balances by investment held and rate of return -- and also supplement the retirement plan details with colorful charts and graphs that depict asset allocation breakdowns, balances over time and personal performance. Additionally, two of the apps also provide participants with a detailed transaction history." (Corporate Insight)
[Opinion] The Data You Need Isn't on Your Retirement Plan Statement
"At the bare minimum, at least three other pieces of information should be included on your statement. The first missing metric is the amount of risk being taken by each investment choice.... The second piece of missing information is the returns in both bull and bear markets.... And finally, a statement should show you what it costs to invest in each individual fund, and this information should be as prominent as the returns, not buried in the disclosures." (Indianapolis Star)
Managing Your Spending in Retirement -- It's Not Rocket Science
"This is not a 'set-and-forget' process. You need to periodically [revisit this process] to reflect investment gains and losses, changes in assumptions, deviations of actual spending from the budget or other changes.... Under [the author's] smoothing algorithm, you generally increase your budget by the increase in inflation over the previous year unless your budget falls outside a 10% corridor around the 'actuarial value' produced by the spreadsheet. Depending on actual results, your budget may increase or decrease from year to year." (Ken Steiner, FSA Retired)
Women Showing Greater Commitment to Retirement Savings
"[T]he average retirement savings balance for women was up 17 percent from a year ago and 71 percent from 2009. The gap between the average balance between women and men narrowed to 37.8 percent in the second quarter from 40.5 percent in 2010.... [T]he average salary deferral rate for women continues to trail men, 5.37 percent to 5.70 percent of compensation, respectively. However, the deferral rates for women have remained fairly steady since 2010 while the rates for men have declined." (MassMutual)
Five Items That Impact the Amount Your 401(k) Participants Need to Retire
"How much do your 401(k) plan participants need to accumulate in their accounts in order to retire without making significant lifestyle adjustments? Here are some estimates from the experts: 8 times final pay at age 67 -- Fidelity ... 11 times final pay at age 65 -- Aon Hewitt ... 18 times final pay -- EBRI ... 25 times final pay -- to ensure an annual withdrawal rate of 4%. With such a wide range of opinions, it can be hard for participants to know what to aim for." (Lawton Retirement Plan Consultants)
A 401(k) Rollover Checklist for Plan Participants
"[A]t a minimum, holding multiple retirement accounts here and there means that you have more holdings to monitor. And if the old 401(k) is subpar, you may actually hinder your returns by staying put.... [1] Check your account value.... [2] Determine whether to stay within the 401(k) confines.... [3] Assess the quality of your 401(k) options.... [4] Find the right IRA provider.... [5] Decide whether to convert your Traditional 401(k) assets to Roth.... [6] Execute.... [ 7] Determine what to invest in." (Morningstar)
Insurance Against Outliving Your Retirement Savings
"New federal tax rules, published in July, make it possible for individuals to buy so-called longevity annuities in their individual retirement accounts and 401(k) plans. Like a plain-vanilla immediate annuity, a longevity policy allows purchasers to convert a lump sum into a pension-like stream of income for life.... But these policies have downsides." (The Wall Street Journal; subscription may be required)
Retirement Readiness for ESOP Participants
"Company contributions to participants' ESOP accounts can be significant and are positioning many employees to retire ready.... In order for your participants to get an idea of their ESOP account might be worth, it would be helpful to first do some education on anticipated ESOP contributions and potential stock value growth so they enter reasonable assumptions into their calculation.... You could also consider sharing the average amount that has been paid to retirees." (The Principal Financial Group)
Pushed to Make Own Choices, Investors Turn to Advisors for Help with Retirement Planning (PDF)
14 pages. "Nearly three in four (72%) investors have saved at least $250,000 for retirement. Despite significant savings, investors lack deep knowledge regarding financial products. 62% of investors save through a broker or financial planner. Investors rely more on the recommendation of their advisors to select investments than any other factor. Nearly four in 10 investors own annuities." (Insured Retirement Institute [IRI])
Embracing Social Media and Mobile Technology in 401(k) Communications
"How important is it that plan sponsors factor social media and mobile into their participant communications strategies? ... Are there any common myths plan sponsors have about social media and mobile use? ... What are some steps or action items a sponsor should take to meet the challenge of this new world of communications? ... What are a few examples of 'meaningful and valuable' information? ... What role does the plan vendor play?" (
Reasons to Hold Off on Your Employer's Pension Buyout Offer
"If you work for a company with a pension plan, don't be surprised if you get an offer soon for a lump sum buyout ... The price tag for these offers is especially attractive right now, from the plan sponsor's perspective. But workers might do better by holding out for a better deal, or by rejecting the buyout altogether.... A key factor is how healthy you think you are in relation to the rest of the population. If you think you'll beat the averages, a lifetime of pension income will always beat the lump sum." (Money)
Defined Contribution Plan Participants' Activities, First Quarter 2014 (PDF)
"In 2014:Q1, 1.3 percent of DC plan participants took withdrawals, the same share as in 2013:Q1.... Only 0.5 percent of DC plan participants took hardship withdrawals during 2014:Q1, compared with 0.4 percent during 2013:Q1.... Only 1.0 percent of DC plan participants stopped contributing in 2014:Q1, the same pace as in 2013:Q1.... At the end of March 2014, 17.7 percent of DC plan participants had loans outstanding, compared with 18.2 percent at year-end 2013, and 15.3 percent at year-end 2008." (Investment Company Institute [ICI])
How Much is a Proper Beneficiary Designation Worth?
"Aside from their primary residence, the largest asset on most peoples' balance sheet is represented by their retirement accounts.... How do you name a beneficiary? ... What happens if a beneficiary is not named? ... Who should I name as beneficiary? ... What options will my beneficiaries have when they inherit the funds? ... What happens if my beneficiary predeceases me? ... Should I name my trust as beneficiary?" (Cleary Gull)
To Claim or Not to Claim: When Should You Take Social Security?
"If you start at 62, you will receive 25 percent less per month than you would at your full retirement age of 66 (if you were born between 1943 and 1954). For those born later, the reduction grows gradually to 30 percent.... If you can wait until you're 70 to claim Social Security, your monthly payment will be 32 percent more." (U.S. News & World Report)
Unexpected Consequences of Early Retirement
"Even if you plan to retire at 45 ... you are still going to be working for two decades. And early retirees need to keep their living expenses lower and save significantly more of their paychecks than people planning to retire at a more traditional retirement age ... Working so hard could make you want to retire even sooner.... You might be afraid to quit.... It's scary to spend down your life savings.... There will be parts of work you will miss." (U.S. News & World Report)
[Opinion] Unconventional Wisdom on Retirement Preparedness
"There are at least three reasons why adequacy standards in the typical replacement rate study are too high: [1] Assumptions about the pattern of savings over workers' life cycles raise the standard for younger workers.... [2] The assumption that household expenses don't change when households transition from work to retirement raises the standard.... [3] The assumption that household expenses remain flat throughout retirement raises the standard.... The danger of accepting the conventional wisdom is two-fold. First, the notion of a widespread shortfall deflects attention from those groups actually at risk in retirement ... Second, it obscures the fact that the U.S. retirement system works well for the majority of households." (Investment Company Institute [ICI])
Smartphone Usage Up Among Retirement Plan Participants
"Smartphone usage among DC plan participants is up significantly from last year (71 percent), which PC/Mac usage has remained basically unchanged (79 percent). Tablet or e-reader usage is trending upward from 57 percent in 2013." (Spectrem Group)
The Required Minimum Distribution Rules Do Not Work Well with Longevity Annuities
"[Actuary Steve Vernon] has his hypothetical 65-year-old woman buy a Qualified Longevity Annuity Contract (QLAC), work half-time in retirement until age 70, defer Social Security commencement until age 70 and use some of her accumulated savings from age 65 until she commences Social Security to supplement her employment income until then.... But then Steve inexplicably has her run off the train tracks on her smart retirement train ride by using the RMD rules to determine her annual withdrawals from her accumulated savings. The RMD rules just don't coordinate well with her decision to buy the QLAC." (Ken Steiner, FSA Retired)
Three Things to Check on a Beneficiary Form -- Besides the Beneficiaries
"[1] Does the beneficiary form work on a per stripes or per capita basis? ... [2] Are there any restrictions on whom you can name as a beneficiary? ... Some beneficiary forms ... may not allow a trust to be named as a beneficiary. Others may limit the number of primary or contingent beneficiaries you can name.... [3] Does the beneficiary form allow the stretch? ... [A] retirement account may require that any beneficiary -- designated or not -- empty an inherited account within 5 years." (The Slott Report)
Women, Low Earners Are Least Likely to Receive Full Retirement Savings Match from Employers (PDF)
"78 percent of Americans who contribute to an employer-sponsored retirement plan receive matching contributions from their employer, and 77 percent of those who have matching contributions save enough to receive the full employer match. However, only 72 percent of women contribute enough to receive the full employer match, compared with 82 percent of men, and only 64 percent of those earning less than $35,000 a year receive the full match. In addition, only 51 percent of those with less than $10,000 in assets receive the full match." (TIAA-CREF)
How Well Does Your Retirement Budget Process Handle Your Specific Situation and Objectives?
"If you are simply spending 4% of your accumulated savings at initial retirement increased with inflation each year, you are probably not adequately reflecting your specific situation or objectives." (Ken Steiner, FSA Retired)
Pogo Stick Retirement Planning for the Younger Generations
"Historically, retirement planning has been likened to a three-legged stool -- consisting of a corporate pension, Social Security and personal savings. Baby boomers saw the pension fade from existence, leaving them to balance on retirement planning stilts. For younger generations, ... it feels like it's all on us. We're left with only a retirement planning pogo stick.... Younger generations should simply expect that we'll be working indefinitely, and, facing that reality, we should labor tirelessly to seek and find the career that doesn't feel like work." (Forbes)

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