This spring, my son was given the popular “egg drop” science assignment. Several weeks before it was due, he discussed elaborate ideas and hoped that his egg would remain intact for extra credit. Yet, at the same time, the deadline was enough in the distant future that he felt no urgency to begin testing his ideas.…Read More
retirement
Retirement Risk Innovation: State Shared-Risk Pensions
Concerns are growing about how to best manage risk in retirement. Traditional defined benefit plans can impart considerable risk to employers, while 401(k)-type plans place all or most risk on employees.…Read More
Goals-Based Investing: From Theory to Practice
In the world of financial advice, we are seeing a welcome trend toward goals-based investing. This trend puts a greater focus on the goals that investors want to achieve with their savings —such as retirement security, paying for college or purchasing a house — and uses these goals to drive investment strategy and monitor progress.…Read More
Recalibrating Retirement In The 21st Century
The dirge is growing louder: financial gurus warn that market returns will be low for some time to come, and not just U.S. stocks and bonds, but foreign returns as well. One forecast argued that average stock returns would be 1.5-4.0 percentage points per year below their 30-year average, and bonds may do 3 to 5 percentage points worse.…Read More
You Don’t Have To Go To College To Save Right
In our new research study which interviewed participants across 10 European countries, our team working with Annamaria Lusardi has demonstrated that financial and risk literacy leads to better choices when it comes to making decisions and identifying the right paths to our financial goals. We also show that the impact of financial and risk literacy on decision-making goes above and beyond that of education. And as in Olivia S. Mitchell’s recent findings, we confirm that women and millennials are least informed when it comes to financial and risk literacy.…Read More
Should You Retire On Your House?
Many American households will face a significant retirement financing gap unless they save more, invest more efficiently, retire later, and/or distribute their retirement assets more efficiently. Yet the pain of such difficult behavioral changes might be mitigated by better use of an asset that almost 80 percent of retirees have: the family home.…Read More
Multiemployer Pension Plans In Crisis: Troubled Plans Need Public Resources To Survive
There is an emerging financial crisis among multiemployer pension plans in America. These plans are a subset of private sector defined benefit pensions covering 10 million workers and retirees. Most critical are the projected bankruptcies of the Teamsters Central States and the United Mineworkers of America plans, making front page news for the last several months. These plans and many others were undermined by two financial market crashes between 2000 and 2009, corporate bankruptcies, de-regulation, and over-regulation. It will now take more than hope to fix them.…Read More
Understanding The Implications Of An Interest Rate Hike
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
Retirement Wellness: Toward A More Complete Framework
While many Americans are focused on providing a financially successful retirement for themselves, I believe that we also should also be aware of the importance of retirement wellness.…Read More
Putting The Pension Back Into Retirement
Defined contribution plans – often known as 401k plans – have become the mainstay of US company pensions, yet their main function has been to get employees to save and invest during their work years. These plans haven’t been successful at delivering lifetime income benefits, as a rule: fewer than one-fifth of all such plans today help workers convert their plan assets into retirement paychecks.…Read More