A shift from defined-benefit to defined-contribution retirement plans means clients increasingly need help from financial advisers to deal with annuities, rollovers and income generation in a low-interest-rate environment, according to a report from Cerulli Associates. Equity-market strength has investors increasing risk-taking to handle health care costs, long-term-care expenses and longevity risk, the report says.
Plentiful savings and sound investment strategies alone will not guarantee a happy retirement. Retirees also need a lifestyle that will prove enjoyable over the long-term, including meaningful hobbies and social gatherings. David Ning offers five steps toward that goal.
A strong majority of baby boomers and members of Generation X say the traditional idea of retirement is a "romantic fantasy of the past," Allianz Life says.
Lower earnings and a shorter working life can affect women's financial security, which means women must plan for retirement differently than men do, Jamie Hopkins writes.
A proposal to subject workers to means testing before they can receive Social Security benefits is a concern, adviser Amanda Lott writes, arguing that proposals need "to consider the impact on all retirees and not just the Warren Buffetts of the world."
Tax-advantaged health savings accounts will soon go through a period of dramatic growth, according to a study from Avidia Bank. Investment in HSAs is expected to quadruple every three years at least until 2020, said Todd Berkley, president of HSA Consulting Services and the study's author.
The likelihood that the Securities and Exchange Commission will require variable annuity summary prospectuses, a longstanding proposal of the Insured Retirement Institute, may have improved with a recent staff change. The regulator's former Investment Management Director Andrew "Buddy" Donohue, who has spoken in favor of a summary prospectus, recently returned to the agency as Chairwoman Mary Jo White's chief of staff.
While many would agree that behavioral psychology has strong applications to investing, one expert says that there is still a wide gulf between the two disciplines. "The problem is that most behavioral finance research is done by 'ivory tower' types who have never worked with financial advisors or clients,” says planner and behavioral expert Brad Klontz.
Rick Fleming, the Securities and Exchange Commission's investor advocate, said he supports the agency's work on summary prospectuses for variable annuities. Former SEC member Troy Paredes said at an Insured Retirement Institute conference this week, "This is an area that it would seem to me to be on where you could find pretty wide consensus." IRI has argued in favor of a summary prospectus for years.