Why 401k and other defined contribution schemes are flawed, leading to a generation of workers unprepared for retirement. What are the solutions to fix the mess. Topics covered include: Show Notes The Shift that Redefined Retirement Security by Shashwat Vidhu Sher—SSRN Was the 401(k) a Mistake? by Michael Steinberger—The New York Times Magazine Who Has Retirement Accounts? New Data Reveal Inequality in Retirement Account Ownership by Maria G. Hoffman, Mark A. Klee and … [Read more...]
441: What If Social Security Had Been Privatized?
In 2005, Congress debated giving U.S. workers private savings accounts to invest their Social Security contributions in the stock and bond markets. Sixteen years later, we review how that would have worked out for workers. Topics covered include: Show Notes Greenspan "There is nothing to prevent the government from creating as much money as it wants."—YouTube Estimated Financial Effects of the "Social Security Personal Savings Guarantee and Prosperity Act of 2005" by Stephen … [Read more...]
405: When Volatility Spikes, Financial Things Break
What is volatility and what causes it to rise and fall? How volatility itself contributes to more volatility such as in the example of the chaotic UK government bond market where long-term yields have increased by 4% in 2022. Topics covered include: Show Notes The volatility virus strikes again by Eric Lonergan—Financial Times How ‘Liability-Driven’ Pension Funds Triggered UK Bond Panic by Loukia Gyftopoulou and Greg Ritchie—Bloomberg UK government debt and deficit: … [Read more...]
398 Plus: Immediate Annuities, Mortality Credits, Leveraged ETFs, and Valuing Pensions
In Plus episode 398, we analyze how much immediate annuity payments have increased as interest rates have risen. We review why payouts on immediate annuities are higher than on a bond ladder. We consider why some leveraged ETFs and ETNs survive and others don't when markets decline. Finally, we look at whether pensions can be considered part of one's net worth, and how to value them. Become a Member If you would like to listen to this episode of Money For the Rest of Us Plus, you … [Read more...]
365 Plus: Three Member Profiles – A Pension Decision, College Tuition Investment, and a Retirement Portfolio
This week on Plus Episode 365, we help a member decide whether to take a lump-sum pension distribution today, start drawing on the pension today or take a lump sum or draw on the pension in the future. We review investment options for a member who will be paying college tuition in the next two years. Finally, we review a retirement portfolio to see if it is invested too aggressively. Become a Member If you would like to listen to this episode of Money For the Rest of Us Plus, you … [Read more...]
356 Plus: September 2021 Investment Conditions, Valuing Pensions, and Maximum Drawdowns
In Plus Episode 356, we review economic trends, asset class valuations, and market internals as of early September 2021. We consider how to value a pension and how to incorporate it into an asset allocation. Finally, we review how maximum drawdown calculations are determined for the Money For the Rest of Us Plus asset allocation model and how frequently maximum drawdowns occur, using the S&P 500 Index as an example. Become a Member If you would like to listen to this episode … [Read more...]
295 Plus: I Bonds, Pension Lump Sums and Speculating in Art
In Plus episode 295 for the week of April 25, 2020, we walk through the process of buying a Series I Savings Bond. We answer a member's questions about taking a lump sum pension payment and review how that payment is determined. Finally, we review art as a speculation. … [Read more...]
269: How the Public Sector Pension Crisis Will Impact You
Why most state and municipal pension plans are underfunded and why that could lead to higher taxes and reduced government services. Why participants in state government retirement systems have greater protection against benefit cuts than participants in municipal retirement systems. In this episode you’ll learn: How defined benefit plans work.Why there is more subjectivity regarding valuing a pension plan's liabilities compared with its assets.What does it mean for a pension … [Read more...]
163 Plus: Federal Reserve, Pension Crisis and Is There Enough To Retire
This week July 1, 2017 on Money For the Rest of Us Plus we learn how bank reserves at the U.S. Federal Reserve will be reduced as the central bank reduces its holdings of U.S Government bonds. We use the tools on Money For the Rest of Us Plus to analyze whether a member will have enough to retire. We explore the severity of pension fund crisis for U.S. states and municipalities as well as for U.S. businesses and the potential fallout from the crisis. Finally, we take a brief look at a … [Read more...]
Are Pension Plans A Dying Retirement Model?
Many companies are shuttering their pensions and replacing them with defined contribution plans. Here's why. Topics covered in this audio lesson include: What is the difference between defined benefit and defined contribution plans. Why companies have moved away from offering defined benefit plans such as pensions. How pension plans are managed. Why most pension plans are underfunded. The lesson length is 6 minutes. … [Read more...]
