Retirement Reform Blog

I figured by the time I  read an article about government employers taking a page from the private sector, I would be too old to read the small print and too senile to care.  But low and behold, the Wall Street Journal (see Jeannette Neumann, “States Shift to Hybrid Pensions“) reports that states are waking up to the fact that their  pension funds are sorely lacking the money needed to pay retirees’ generous benefits.  Utah and Michigan have begun “hybrid” plans for newly hired public workers.  These plans are a combination of defined benefit (the state contributes to the worker’s pension) and defined contribution where the worker contributes his or her own money to the pension – similar to a 401(k) plan.

As Neumann notes, six other states have hybrid plans as well…not enough, in my opinion, but hey, it’s a start.  If I am a bit enthusiastic about this undertaking of pushing workers to fund more of their retirement plans, it is not for a lack of compassion.  Indeed, hybrid plans are compassionate, progressive  and environmentally responsible.  Let me explain: Read the rest of this entry »

A recent article on Forbes online discusses the benefits of "pensionizing" one's 401(k) as a way to dam up the flood of money leaching from the ever downward-spiraling market:

"Seeing how well most 401(k) plans have done in the past year, the answer still seems to be that for many, added flexibility is no replacement for steady, guaranteed returns. But those days are long gone for many. But that doesn't mean that even in a down market that you can't try to trim your losses. How? Do like the pensions do and re-balance your portfolio ever six months or so, selling off your winners and bumping up your losers. This way you're always selling high and buying when things are cheap. "The only way that the investor is going to be able to respond accordingly is if they are aware of what is happening in their portfolio," says Roseman."

Read the rest of this entry »

I came across an informative in article in the Wall Street Journal this week, "How to Fix Your Life in 2009," (read article here), The premise is that frugality is now in; spending less and saving more is fashionable, so to speak.  So for those of you throwing up your arms in despair over the losses in your retirement accounts, the article includes several pointers on preserving and adding to your retirement savings, as well as cost-cutting ideas in other areas of living.

It may be tempting to grimace at reading another "how to" article in light of the fact that so many people already want to tell other people what to do with their time, money and energy, especially in the area of retirement savings.  So whether or not you read any financial advice for 2009, approach the year with a realistic attitude about retirement savings.  Don't give in or give up.  Market downturns are temporary.  But retirement planning is permanent.

Have a prosperous New Year.

It looks as if pensions aren’t going to be enough to secure a good retirement for most Americans.  According to a study from the Employee Benefit Research Institute (EBRI), less than half of men (42.6 percent) and just over a quarter (27.9 percent) of women aged 65 and over received annuity or pension income in 2007 as part of their retirement.

Read the rest of this entry »

Imagine waking up one day and discovering that your private pension or 401(k) account (which has earned an average double-digit rate of return for 18 years) has been confiscated by the government.  This is a reality for the folks in Argentina, where President Kirchner announced a plan to "nationalize" the nation's private pension system, citing that the stock market is "too risky." But the greater risk is the whittling away of private investment rights for Argentenians by a cash-strapped bureaucracy.  Let's hope this idea doesn't cross continents….(Read the WSJ article here)