Most 401k presentations include a slide that illustrates the importance of dollar-cost-averaging and the benefits of a buy-and-hold approach to investing over the long-term. 

The point is typically supported by data indicating that most investment gains are created by a relatively small number of days during which the markets experience big moves. The conclusion is that market timing is futile and that it pays to just hang-in there and avoid the performance drag that results from missing-out on the handful of key days. 

Goldman Sachs recently agreed to purchase Dwight Asset Management from Old Mutual.

Dwight is a fixed income manager that specializes in stable value funds.  The firm currently has $42 billion in assets under management.

Stable value funds provide 401k plan participants with a very low risk fixed income option. 

The Treasury Department just released a proposed set of regulations that could have a meaningful impact on the retirement income market in the U.S.

The Treasury’s guidance package builds on feedback received in response to the request for comments issued by the Labor and Treasury Departments last fall.

The proposed regulations appear to be squarely focused on longevity risk.  The basis for this concern—particularly as it pertains to the middle class—is summarized in the following chart:

One way to evaluate a pension buyout involves determining what your future pension payments are worth today and then comparing that value to the buyout offer.

In other words, compare the lump sum pension buyout offer to what would you have to pay today to buy and annuity that locks-in a future stream of income that lasts for the rest of your life.

The Lifetime Income Disclosure Act introduced by the U.S. Senate last year would require 401k plan sponsors (employers) to provide plan participants (employees) with estimates of the amount of lifetime income that would be generated by their account balances.

The UC Berkeley Center for Labor Research and Education just released an interesting research report titled “Meeting California’s Retirement Security Challenge.”

The report has an introduction written by Jacob Hacker—a Political Science professor at Yale University.

Hacker’s introduction focuses on what he refers to as the “Great Risk Shift” and is appropriately titled “The Coming Age of Retirement Insecurity.”

Anyone thinking about retirement income should pick-up a copy of Retirement Portfolios by Michael Zwecher.  This recommendation applies to both financial services professionals and consumers who are approaching or at retirement. 

Zwecher’s book is the definitive guide to constructing and maintaining portfolios that generate sustainable retirement income.  

Dimensional Fund Advisors (DFA) appears to be ramping-up its retirement income efforts.

Advisor One reported on the recent DFA-sponsored retirement planning conference in Chicago.

DFA's retirement income efforts appear to be largely focused on the defined contribution or 401k market.  DFA's retirement income offering is named "Managed DC."  The product appears to be offered exclusively in the retirement plan market.

DFA has a huge presence in the asset accumulation space with $232 billion in assets under management.

At the request of Wisconsin Senator Herb Kohl, the Government Accountability Office (GAO) just released a study that provides an assessment of the current state of the retirement income market in the United States.

For those interested in retirement income, the study is full of interesting data and conclusions.  Some of the highlights include:

The majority of Americans are keenly interested in retirement income, but they are unable to make the connection between how their retirement savings translates to income.