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Video and Text: Steve Forbes Interview with Olivia Mitchell, Pension and Retirement Expert

Certainly the pension structure in the U.S. is in grave trouble. State, local and municipal pension plans are underfunded by about $3 trillion ? probably about 65% funded, if you do the math their way. Probably about 30% funded, if you do the math, I think, the more accurate way.

Towers Watson?Forbes Insights 2010 Pension Risk Survey

Excerpt: There is no sign that the decline in the sponsorship of active defined benefit (DB) plans has reversed. Neither is the extinction of DB plans imminent. Instead, the survey shows that most sponsors of active plans will continue to provide retirement benefits, although many will cut back on benefits, and some are indeed seeking to close or freeze. The task for pension plan sponsors, according to respondents, is to take action to manage risk and reduce liabilities.

Do-It-Yourself Retirement: There's a Tool Kit on the Web to Help You Do It

Excerpt: As the box on page 94 [of this Forbes Magazine article] shows, a slew of sophisticated do-it-yourself retirement planning tools are now available on the Web at little or no cost to help you gauge your prospects and calibrate the tradeoffs you may have to make. [See 'The Best of the Web Retirement Planning Tools' at http://www.forbes.com/forbes/2005/0606/092sidebar.html.]

Most and Least Expensive States for Health Care, Ranked

"Health care costs averaged over $10,000 per person in 2020, but the exact amount varied by state. [Forbes] compared all 50 states and the District of Columbia across 11 key metrics using data from the Kaiser Family Foundation ... South Dakota topped the list of states with the most expensive health care, while Michigan is the cheapest."

Fidelity 401(k) Price-Fixing Scheme Cost Retirement Savers Plenty

"Anyone who believes that the marketplace for 401(k) plan services has been competitive over the past three decades or that there have not been widespread systemic abuses in the retirement savings industry, should study closely what Fidelity admits it did for four years from 2004 through 2008 -- until Forbes drew attention to the practice and Fidelity relented. By the way, it is likely that Fidelity was not alone in these practices and that they may continue at other 401(k) administrators."

How Some Companies Shortchange 401(k) Participants

Excerpt: In a new story on Forbes.com, William Barrett reports that companies that automatically enroll their workers into retirement savings plans like 401(k)s may not be as generous as they appear. Barrett writes, 'Even after controlling for the differences in match rates by company size and industry, the matches at firms with automatic enrollment were still about 7 percentage points, or 7 cents per dollar, lower. That gap allowed companies to offset two-fifths of the increase in their retirement expense that comes from having more workers participate.'

The Tax-Deferral Trap?

See item #4 in the newsletter. Excerpt: Novel advice on how to save for retirement: do not put any more money in your tax-deferred retirement savings! Such advise is heresy in a world where people hate taxes and it has been taken as gospel that you should defer them if you can. A commentary in Forbes magazine from William Baldwin admits that for two decades Forbes has been advising people to maximize their tax-deferred accounts, and, at the other end, to minimize withdrawals. 'Let your earnings compound tax free. Deferral is magic.' This advice is not necessarily true anymore. After a year of turmoil in Washington and on Wall Street, it may be time to rethink savings.

Entrepreneurs Financing Start-Ups from Retirement Accounts: The 'Rollover As Business Start-Ups'

Excerpt: The Internal Revenue Service has recently expressed concerns about the technique. This method of financing start-ups has been around--and controversial--for some time. Forbes first looked at the pros and cons of using retirement accounts to finance businesses in 2004. Our advice: Entrepreneurs interested in the method should split their IRAs into two, one to invest in the new business and the other to manage a diversified retirement portfolio separate from the new business and associated risks.

The Pharmacy Benefits Ecosystem Is Broken: How PBMs Can Help

"[T]wo areas [for PBMs to] focus on in the coming months ... [1] Operate with full clarity on money flow and decision-making (i.e., clearly defined administrative fees) while making the whole process accessible and visible to your clients.... [2] [C]harge a clear administrative fee and return every rebate and discount to the client. This can help your PBM regain trust and relieve some of the strain that could lead clients to seek alternate options."

Advisors’ Concerns About Market Valuations Affecting Option Strategies

"Widespread fears about a stock-price bubble surrounding the AI boom, and a potential market correction, have raised worries for employees with equity compensation. Employee stock options are especially vulnerable ... Concerns about stock markets and investing bubbles can be managed by a carefully developed long-term financial plan for equity compensation and company shares[.]"