Welcome back to the conclusion of the story. As discussed, with target date investment options, some glide paths can be “too hot”, some can be “too cold”, but there is no “just right”. Sorry to lead you on.
But, I believe the answer lies somewhere between the “hot” and “cold” glide paths. And it’s not a spot, but rather a path to the end – a (hopefully) comfortable retirement. Read more
This glide path’s too cold…
The first blog in this fairy-tale analogy blog series and the asset allocation approach discussed might suggest that as a portfolio manager I should be concerned about the risk of loss to the portfolios. And I am, but not to the point of ignoring other risks. As I structure target date series I seek to mitigate other risks as well. If I avoid equities altogether in a target date series it can produce the opposite problem – not enough growth potential in the portfolio. Read more
There is still a lot of confusion out there about how the non-ERISA safe harbor works. Many people over simplify the rules and assume if there is no employer contribution that you will be a non-ERISA 403(b) plan. That couldn’t be further from the truth. If there is any active involvement of the employer, it likely crosses the ERISA line. Read more
As Valentine’s Day is celebrated in the US this week, millions of people will crowd the aisles of shopping malls and grocery stores looking for the perfect gifts to celebrate their love and affection for one another. According to the Annual Valentine’s Day Spending Survey from the National Retail Federation, 91% of Americans who are currently in a relationship will celebrate to the tune of $18.6B this holiday season.1 Isn’t love grand?!
During his State of the Union address last week, President Obama announced a new retirement savings program called My Retirement Account or MyRA.
Labeled as a “starter savings account,” the plan is intended to be a voluntary savings vehicle for those who want to save for retirement, but don’t have access to a retirement plan at work. Read more
Much like Goldilocks looking for the right porridge, investors preparing for retirement have a great deal of choices and many are not “just right.” I’m the lead portfolio manager of The Principal target date series, and I’m going to use a fairy tale analogy to help explain the forest and the path we take through it. Target date investment options are designed to help an individual navigate the course between a career of saving and a comfortable retirement. Read more
While on vacation last summer my family took a break from boating and stopped at the lake resort’s candy shop “The Sugar Shack”. My kids were each allowed to choose any candy of their liking. Just imagine being a kid and walking into the shop with aisles of glass candy jars filled with any kind of candy imaginable. There were so many choices and it was difficult for them to decide… chocolate, toffee, gummy bears, etc. Both kids wandered around the store for many minutes. Each paralyzed to make a choice for fear they would make a mistake and want something different. Just before I was to lose my patience my daughter decided, but it took several more minutes before my son picked up a scoop. In the end my daughter chose just one candy (white grapefruit gummy slices), while my son ended up with an assortment of candies (mostly of the chocolate variety).