Retirement Reform Blog

To readers who are having misgivings about the stock market, the bond market, your 401(k) or IRA accounts and retirement savings in general:  Take a look at the new NCPA policy report, "Ten Ways to Wreck Your Retirement."  While some of the ways seem obvious, the recent economic turmoil have left some savers tossing common sense out the window.  So think carefully before you cash out and stick your money under the mattress or invest in ostrich farms of dubious value (remember those from the 1980s?).

Whether because of his slow, steady pace or the big hard shell on his back, the turtle is a reptile we should all consider emulating during a market downturn.  This economic landslide in particular has caused hysteria among investors looking to build their retirement nest eggs and has prompted many to leave the market all together opting for the cookie jar or the sock under the mattress instead. The prolonged contraction we are facing has many wondering whether or not we’ve even hit the bottom yet.  But take heart! The clouds will soon break.  It’s all in the approach.

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Many 401(k) plan participants are likely familiar with target date funds.  Target date funds, also known as lifecycle funds, shift allocations of bonds, stocks and cash based on the expected year the plan participant will retire.  For instance, those who are decades away from retirement will have a greater allocation of stocks in their target date fund than those who are fast approaching retirement.  But a recent article in the Wall Street Journal argues that since target date funds are based on years until retirement and not individual levels of risk, they may not be the best investment choice for everybody.  Read more here.