A 401k is an employer-sponsored, long-term savings plan that is intended to help you sock-away money for your retirement. A 401k offers significant tax breaks and has a few drawbacks. The money you put away now to be used later after 59 ½ years of age or at retirement is not taxed until it is distributed. Some companies match part of the dollars that you stash away. Your retirement savings are increased through these employer matching contributions. You can borrow against a portion of a 401K, as long as you pay it back plus the low interest. Otherwise, if you tap into your savings before 59 ½, you pay penalties for early withdrawal and the early distribution is also treated as regular income for tax purposes.

Why Capital Preservation is a First Principle

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...

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Goldman Sachs Focusing on Retirement Market with Acquisition

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 Dwight acquisition will allow Goldman to enhance its offerings in the defined contribution or 401k market. Stable value options are one of the largest asset classes in the 401k space...

Treasury Department Focuses on Longevity Risk with Retirement Income Guidance

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.


Calculating the Value of a Pension Buyout Offer

One way to evaluate a...

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