Retirement

Conservative is in the eye of the beholder when it comes to target date funds. Very generally, target date funds are mutual fund offerings that automatically shift asset allocations to a more conservative profile as the fund owner approaches retirement age. In other words, a "2015" fund may be purchased by someone intending to retire on or around 2015. This 2015 fund will likely move towards a higher bond and lower equity allocation as 2015 approaches. It turns out that target date funds can be...

A recent article discusses the challenges that retirees and near retirees face in the UK: "Dr Ros Altmann, one of Britain's top pensions experts and author of the Planning For Retirement report, says: 'The old idea that the stock market can always be relied on to deliver longterm strong returns has left millions facing an impoverished old age." While the UK has compulsory annuitization , there are many aspects of England's financial system and demographic profile that are similar to the United...

Retirement experts are working through the Retirement Security Project in Washington to develop concepts that would increase annuity ownership within 401k plans. Concepts include providing 401k participants with the ability to test drive annuities through an "automatic trial income strategy." In other words, at retirement about half of a person's plan assets would be placed in a trial income plan that would pay out a monthly annuity income for two years. Participants would then have the ability...

In the interest of considering the impact of deficit spending on inflation and inflation's impact on personal finances and retirement income : Total outstanding government debt in 2007 when Democrats took control of both the House and the Senate: $4.8 trillion. Projected budget surplus in 2019 if Congress had maintained the level of spending that existed when Democrats took power in 2007: $70 billion. Proposed spending increases between 2009 and 2018 in President Obama's May budget proposal: $5...

A very good article discusses Vanguard Founder John Bogle's views and work on the retirement system in the United States. Bogle is a highly vocal critic of the status quo: "Our nation's system of retirement security is imperiled, headed for a serious train wreck.That wreck is not merely waiting to happen; we are running on a dangerous track that is leading directly to a serious crash that will disable major parts of our retirement system." There are some interesting and surprising statistics:...