Income

It turns out that many target date funds are juiced by high yield or "junk" bonds. The issue is that target date funds (which presumably become more conservative over time as participants age) are riskier than what is generally perceived by consumers, regulators and financial advisors. This higher level of risk is consistent with the higher than expected volatility and losses experienced by many target date funds during the financial crisis. According to a recent Bloomberg article, up to 35...

Members of Congress and officials from the Departments of Treasury and Labor are working on options that would provide sources of guaranteed lifetime income to participants in 401k and other pension plans. At a high level, it is clear that the Obama Administration wants to create structures and incentives for: Increasing retirement savings. Providing people with the ability to turn those accumulated savings into streams of income that last through retirement. A trial program that would involve...

The Senate introduced a piece of legislation that would require retirement plan sponsors to provide plan participants with estimates of how much income their accounts will generate in retirement. The majority of Americans approach retirement without a basic financial plan and with resources that are not sufficient for support of pre-retirement spending and lifestyles. The Lifetime Income Disclosure Act would provide Americans with a clear picture of the income-producing potential of their...