Market Risk

Target date funds are receiving attention from the SEC, the DOL and Congress. The increased scrutiny is a result of the way that target date funds have performed during the market meltdown over the past year. As reported recently , in theory target date funds are supposed to provide a smooth and somewhat automated transition from more risky assets to less risky assets as people approach retirement. One of the problems is that the actual asset allocations for people approaching retirement varies...

Sales of variable annuity products in the United States cratered 27% during the first quarter of 2009. First quarter sales were $30.7 billion compared to $40.9 billion during the first three months of 2008. At the same time, sales of fixed annuities surged 74% to $35.6 billion. This is the first time since 1995 that sales of fixed annuities have exceeded sales of variable annuities for two straight quarters. This sales dynamic is not surprising and is largely a reaction to the market volatility...

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:...

How much do I need to save for retirement? How do I plan for retirement? Both are pretty basic questions that are top of mind for most people who are at or approaching retirement age, and the uncertainty and anxiety around these questions have only increased in light of the financial crisis. A recent article lists 5 risks that should be on the radar of anyone contemplating retirement: Inflation Longevity risk Market risk Health problems and expenses Losing a job or unexpected retirement Source...

Fitch Ratings cut their ratings on Hartford Financial Services Group to two steps above junk status. Analysts are concerned about Hartford's decision to pause or cancel annuity sales in Japan, Germany and the U.K. Hartford has also begun implementing major changes to its U.S. based variable annuity business. Hartford is one of the life and annuity insurers that has been particularly hard hit by the capital market risk and volatility that has been rampant during the financial crisis. Source:...