As your trusted retirement plan consultant we are always happy to make retirement planning less puzzling. But if you’re the type who still enjoys a puzzle now and then, see if you can spot the eight retirement-related terms in our Retirement Word Search! Retirement Plan Puzzle
February Retirement Report
February’s Retirement Report includes some interesting topics. The first talks about 3 funds recommended for all retirement plans. Behavioral Economics teaches many lessons. First, sometimes less is more. Nowhere is this truer than in retirement plans, where offering fewer funds drives greater participation and less confusion. When building an optimal retirement plan, we continuously conclude the ideal number of investments to be three – three index-based fund options, that is.
The next topic talks about the importance of a qualitative review of the funds inside your plan. The qualitative review of a mutual fund helps support the quantitative analysis within the Scorecard System™ by providing color and insight into the portfolio and the investment performance.
The Weekly Bottom Line
• Global markets remained tense this week as the continuing standoff between Russia and the West on the issue of Crimea weighed on sentiment.
• Chinese data on exports, industrial production and retail sales disappointed with the numbers for the January/February period painting a picture of an economy that’s decelerating at a worrying pace.
• Unless the geopolitical situation deteriorates rapidly early next week, the Fed is likely to continue to trim bond buying by $10bn to $55bn per month, remaining of the view that much of the weakness in recent economic indicators has been weather related and economic growth will accelerate with the spring thaw.
• The acceleration could be helped along should the recent Senate proposal to extend jobless benefits retroactively for another five months pass Congress. See Bottom Line
You Can Thank or Blame Richard Stanger for Writing 401(k)
“We’ve been looking for someone who was involved in actually writing section 401(k) of the U.S. tax code more than 35 years ago, read the e-mail to Richard Stanger. “Yes, that’s me,” he wrote back.
Stanger was a primary author of a little-noticed piece of a 1978 tax law. At the time, the 869-word insert was lost in the political heat of limits on tax-deductible three-martini lunches, lower capital gains rates and a bipartisan coalition that was rejecting President Jimmy Carter’s proposals. Today, 401(k) is likely the most recognizable number in the Internal Revenue Code.
As the first 401(k) generation ages — about 10,000 baby boomers turn 65 every day in the U.S. — questions multiply about the adequacy of their finances. Just last week, President Barack Obama proposed a new retirement plan for Americans who don’t have 401(k) plans at work as he warned that Social Security often isn’t enough to rely on.” See Thank or Blame
January Retirement Report
The first Retirement Report of 2014 includes some interesting topics, including an evolving investment option inside some 401k plans-Retirement Income Solutions (RIS) are retirement plan investment options designed to generate a post retirement income stream from participant accumulated retirement savings and include guarantees of minimum withdrawal amounts for life.The next topic is regarding specialty asset classes inside 401k plans which are those which do not fall into the “core” group of asset classes. Core asset classes include: U.S. domestic equities, international, and fixed income. Are they worth the fiduciary risk? And finally understanding different Fee methods inside plans. A plan fiduciary can elect to pay or allocate plan fees in a number of different ways. In fact, the DOL observed in Field Assistance Bulletin (FAB) 2003-03 that plan sponsors and fiduciaries have considerable discretion in determining, as a matter of plan design or a matter of plan administration, how plan expenses will be allocated among participants and beneficiaries. January 2014
4th Quarter Newsletter 12/31/2013
Diversification is the foundation of any sound portfolio. It’s how risk is controlled; a process of balancing potential negatives against potential positives and the tempering of uncertainty. Diversification buffers surprises, both good and bad. The financial media has coined the phrases “Risk-on” and “Risk-off” to identify positive and negative investment climates. “Risk-on” has certainly been an accurate description for the US stock market for 2013 and it appears, at least for now, 2014. Risk has its positive moments. Stocks just finished their best year since 1997. An allocation to bonds in a portfolio has been a way to balance risk as historically bonds have more consistent returns and more consistently positive returns. The last year bonds recorded a negative return was 1999; and now 2013. The stock markets have, as a rule, more consistently varied returns both positive and negative. Newsletter 12-31-2013
Best & Worst Investments of 2013
“It wasn’t hard to make money in 2013, just as long as you were invested in U.S. stocks. Nine of every 10 stocks in the S&P 500 Index ($INX) are set to end the year in positive territory.
Yet many other asset classes suffered. Just two in five U.S. bond funds broke even for investors. Emerging market equities still haven’t recovered from a rough summer, and almost anything associated with gold lost money. As the new year approaches, Bloomberg tallied the biggest winners and losers so far, from stocks and mutual funds to master-limited partnerships and IPOs.” See Best & Worst
Retirement Plan Fees-Are you Getting the Best Deal?
On Tuesday January 28th at 8:30am we will be running a seminar at the ABC Delaware Classroom titled “Retirement Plan Fees-Are you Getting the Best Deal?” HRCI credits will be available, here are some of topics that we will be discussing:
Do you know what you are being charged in retirement plan fees?
Making Sense of Retirement Plan Fees
How can you determine if your fees are reasonable?
December Retirement Report
On behalf of the Management Team of TP Investment Advisory, it is my pleasure to extend you the greetings of this special season. It is certainly one of my favorite times of year, and the perfect opportunity to express our gratitude to you for selecting TP Investment Advisory as your committed consultant. As I look forward to a new year and the hope it brings, I look back as well on our achievements in 2013, and the degree to which we accomplished our primary goals – protecting you as a fiduciary and helping your plan participants prepare for a meaningful retirement. Congratulations for all that you accomplished in 2013. We remain fiercely proud of being your dedicated Retirement Plan Consultant.
As we do each December, this month’s Retirement Report highlights “excerpts” from issues published in 2013. Please contact us with any questions or feedback; we look forward to serving you in 2014! December 2013
Taper Talk
“Tapering…please bring it on. We wanted it yesterday, or last month, or even years ago. We never thought QE helped the economy and certainly don’t think keeping it around is a good idea. It’s created uncertainty at an unprecedented level.
But, we aren’t holding our breath waiting for the Fed to change course. Despite better data on the economy, the Fed will take its sweet time, possibly waiting until March before slowing the pace of “quantitative easing,” the monthly purchase of $85 billion in long-term securities.” See Taper Talk