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Retirement Section

News

Match or No Match, 401(k) Contributions Are Critical

Advisers are recommending that investors continue to make contributions to their 401(k).

Group Annuities May Be Inappropriate for 401(k)s

Critics cite lockups, higher fees.

Even Stable-Value Funds Carry Risk, Watson Wyatt Warns

Citing an unpredictable market, the consultant urges plan sponsors to review their offerings.

U.S. Older Population to Jump from 13% to 20% by 2030

The aging population will put a strain on government programs and slow growth.

Financial Engines’ Retirement Checkup Emphasizes Minor Adjustments

Those within five years of retirement only have to make modest adjustments to recoup losses.

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Articles

Target-Date Fund Hearing Focuses on Disclosure

At the hearing on target-date funds that the Department of Labor and the Securities and Exchange Commission held in Washington last Thursday, the focus was on better disclosure of holdings. Even though the makeup and glidepaths of target-date funds vary so considerably, as proven by the range of minus 7% to minus 41% that 2010 target-date funds delivered in 2008, fund executives resisted government-mandated caps on holdings.

Providers Look for Auto Rollover Solutions to Include Job Changers

WASHINGTON - With 47% of 401(k) plans now using automatic enrollment, the programs have helped get millions of new workers enrolled to start saving early for retirement, but industry experts say the automatic nature of these plans needs to extend to helping 'hands-off' investors when they change jobs. When an employee leaves a job, he or she can choose to roll over their money into an individual retirement account (IRA), take a lump-sum payment minus taxes and a 10% penalty, or do nothing and leave their money in the 401(k). Sir Isaac Newton would predict the latter.

Sponsors Continue to Add Many Features to 401(k)s

Although there have been reports of one-third of employers cutting back on or eliminating 401(k) matches, for the most part, they have continued to add other features to the plans to increase participation and investment rates, Charles Schwab found. And that has helped most workers stay the retirement savings course. In fact, of the plans that Schwab manages, participation increased in 2008 to 77%, up from 73% from the year before. Plans with between 500 and 1,000 participants displayed the highest participation rate (88%). A majority of employers, 70%, continued to offer a 401(k) match in 2008, down from 78% in 2007. Of those that did offer a match, only 8% reduced it.

Many Advisers Loathe to Discuss Damage

A recent cartoon in The New Yorker surely sums up many retirement investors' feelings toward their financial advisers: It depicts them being sacrificed to a volcano. There is no getting around the fact that it is an intimidating time to be a financial adviser. Clients' retirement portfolios got slammed last year, and many investors are understandably furious. But mutual fund and brokerage executives say too many advisers are responding by doing the exact wrong thing: avoiding their clients.

2008 a Watershed Year For Some Advisers

From recommending different products to rethinking their risk management strategy, some financial advisers say they have changed their approach in the wake of last year's market slump. Indeed, many retail investors remain on the sidelines of the stock market, with assets in equity funds only half of what they were in late 2007 before the economic crisis began and the market lost 56% of its value. 'We have to be proactive as far as a new strategy, and that strategy certainly isn't, 'Hang in there,'' said Dennis Reeve, PrimeVest Financial Services' investment program manager at Lake City Bank in Warsaw, Ind.

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