Public pensions struggle to increase their yields in a low return world. Also, pension trustees are often political appointees lacking financial backgrounds, so they may not fully consider the risks of potential new investment options, says Wharton Prof. Olivia S. Mitchell, in the WSJ.…Read More
The Federal Reserve will keep near-zero interest rates ‘til at least 2023. But long-term low returns will lead people to save less for retirement, dip into retirement savings, and start drawing social security benefits earlier than planned, causing problems down the line, says Wharton Prof. Olivia S. Mitchell via Penn Today.…Read More
The COVID-19 economic crisis is a perfect storm for retirement savings with near-zero interest rates, early Social Security benefit claiming, some using their retirement accounts to make ends meet, and the looming insolvency of the Social Security Trust Fund: Wharton Prof. Olivia S. Mitchell discusses with Knowledge@Wharton.…Read More
The Social Security Administration’s estimates of its shortfalls are overly optimistic, and looming insolvency will likely come sooner than expected unless key problems are addressed, cautions James Moore on the RetireSecure blog.…Read More
Low interest rates and population aging will be with us a long time, so reforms are needed to stabilize and strengthen retirement systems. Options include working longer, deferred annuities, and more financial literacy, says Wharton Prof. Olivia S. Mitchell in her new study, cited by Benefits Canada.…Read More
Ultra-low, negative interest rates are a reality, maybe for years to come: This changes how people save and invest. “Save more, work longer, expect less,” recommends Prof. Olivia S. Mitchell of Wharton to AP News.…Read More
In the summer of 2007, markets roiled as what would become a global financial crisis first started to manifest itself in U.S. capital markets. It was a time when risk models, designed for calmer times, could not capture the sheer magnitude of what lay ahead……Read More
Pundits keep a close watch on the U.S. Federal Reserve as it meets to raise interest rates after seven years of effectively zero rates. Yet the reality is that many Americans know little about interest rates, and much less about the implications of a rate hike for their finances! This was one key finding from the recently released S&P Global FinLit Survey, gathered with the support of McGraw Hill Financial.…Read More
Interest rates are nothing more than the cost of spending money today instead of saving it. And a main tool of monetary policy has always been controlling interest rates as a means of stimulating or cooling off economic activity. When central bankers lower interest rates, they encourage people to spend more today. This is because lowering the return on saving encourages firms to hire and invest to meet the increased demand and boosts economic activity.…Read More
The global economic environment presents new challenges for investors across the board. Public and private pension plans, consultants, Wall Street strategists, and money managers have all ratcheted down their forward-looking views on asset returns, meaning that defined contribution plan participants will be hurting if the financial community’s morose predictions bear fruit.…Read More
