Mark J. Warshawsky is Director of Retirement Research at Towers Watson.

Dr. Warshawsky served as assistant secretary for economic policy at the U.S. Treasury Department from 2004-2006 and he has held senior level economic research positions at the Federal Reserve Board, the Internal Revenue Service and TIAA-CREF.

The Association of British Insurers announced that the organization will adopt a new code of conduct that could have a meaningful impact on annuity sales.

The decision is in response to criticisms of annuity industry sales processes.  Critics have argued that current industry practices are inconsistent and opaque, and that this confusing annuity shopping environment ends-up costing financial services consumers real money. 

The Society of Actuaries (SOA) just published a series of short whitepapers or “briefs” that focus on some of the major decisions that are encountered by retirees.

This is a great resource for consumers who are seeking objective content produced by experts.

The Society has clearly made efforts to create content that is accessible to a non professional audience.  The briefs are clear, short and focus on consumer-relevant topics such as “when should I retire.”

There are 11 briefs, and the topics include:

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:

Is there a sense of “swimming upstream” when trying to propagate goal-based investing--as described in your new book Risk Less and Prosper--among existing financial advisors? Conventional practices and economic incentives are so heavily skewed towards modern portfolio theory and growing assets under management. 

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.

Defined benefit pension plans are the traditional and increasingly rare type of pension plans offered through employers.

In contrast to defined contribution pension plans such as the 401(k), participants in defined benefit (“DB”) plans receive contractually guaranteed income and assume none of the risks (investment risk, interest rate risk, longevity risk, etc) associated with producing that lifetime income stream.

The problem is that defined benefit plans are scarce, and many of those that do still exist are in tough shape.

Retirees and those saving for retirement should think of themselves as the managers of their own personal pension plan.  

Many people used to have access to a traditional, defined benefit pension plan through their employers.  With a defined benefit pension plan, someone else (an employer or professional managers hired by an employer) assumes responsibility for managing plan contributions, investments and income distributions. 

A very interesting article from Financial Times columnist David Stevenson suggests that investors are making the very common mistake of missing sight of the forest for the trees. 

In this case, the trees are the daily ups and downs of the stock market.  Market volatility naturally draws many people into a sort of short-term obsession with undulating asset prices and portfolio values. 

A recent research report from Swiss Re suggests that life expectancy increases over the past several decades have been consistently underestimated. 

The report, titled “A window into the future: Understanding and predicting longevity,” examines the traditional methods of forecasting life expectancy—both of which are largely based on historical trends.