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Auditing Recordkeeper Statements — A Fiduciary Duty?

Adhering to prudent standards includes auditing quarterly statements from the recordkeeper. However, there is no explicit requirement for plan fiduciaries to do so. With regard to plan assets, fiduciaries have the explicit duty to ensure that: employee deferrals are contributed in a timely manner; the plan does not engage in prohibited transactions; and plan assets are used exclusively to pay plan benefits and defray reasonable plan expenses. Fiduciaries must act prudently in carrying out these duties. A bright-line test…

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Women in Retirement: 60 Percent Not Saving Enough

In November 2016, the Texas Conference for Women surveyed attendees about their retirement savings and found that almost a whopping 60 percent weren’t socking away enough. In fact, many weren’t even sure if they were going in the right direction. One person responded, “I don’t know if I’m on track, and that’s the worst part.” Many women are doubtful that they can retire comfortably, if at all. Consider these results of the 17th Annual Transamerica Retirement Survey: Women believe…

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Portfolio Patriotism—Domestic Market Optimism or Inadvertent Asset Allocation?

Globalization of the world economy has increased exposure to international investments, yet equity portfolios in general remain largely home biased today. This may be a good time for participants to reevaluate their asset allocation to see if they may be exhibiting a home country bias— or displaying overly optimistic expectations about the domestic market and/or pessimism about foreign markets. After years of mediocre growth from developed international equity markets, we are finally starting to see signs of life abroad….

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How do the Economic Milestones of Young Adults Today Compare With Prior Generations?

If you’re the parent of a young adult who is still living at home, you might be wondering whether this situation is commonplace. According to a recent U.S. Census Bureau study, it is: One in three young people (ages 18 to 34) lived in their parents’ home in 2015. The Census Bureau study examines how the economic and demographic characteristics of young adults have changed from 1975 to 2016. In 1975, for example, less than one-fourth of young adults…

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Kickstart Your College Fund with a 529 Plan

If you’re looking to save money for college, one option to consider is a 529 college savings plan. Created over 20 years ago and named after the section of the tax code that governs them, 529 plans offer a unique combination of features that have made them the 401(k)s of the college savings world. How do 529 plans work? 529 college savings plans are individual investment-type accounts specifically made for college savings. People at all income levels are eligible….

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Test Your Investing IQ

How much do you know about market basics? Put your investing IQ to the test with this quiz on stocks, bonds, and mutual funds. Questions 1. What does it mean to buy stock in a company? a. The investor loans money to the company b. The investor becomes a part owner of the company c. The investor is liable for the company’s debts 2. Which of the following statements about stock indexes is correct? a. A stock index is…

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Working in Retirement: What You Need to Know

Planning on working during retirement? If so, you’re not alone. Recent studies have consistently shown that a majority of retirees plan to work at least some period of time during their retirement years. Here are some points to consider. Why work during retirement? Obviously, if you work during retirement, you’ll be earning money and relying less on your retirement savings, leaving more to grow for the future. You may also have access to affordable health care, as more and…

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How do TIPS Help Fight Inflation?

One way to help protect your portfolio against a sudden spike in inflation is by investing in Treasury Inflation-Protected Securities (TIPS). TIPS are guaranteed by the federal government as to the timely payment of principal and interest. They are sold in $100 increments and available in maturities of 5, 10, and 30 years. The principal is automatically adjusted twice a year to match any increases or decreases in the Consumer Price Index (CPI). If the CPI moves up or…

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How do Economists Measure Inflation, and Why Does it Matter to Investors?

How do economists measure inflation, and why does it matter to investors? The Federal Open Market Committee (FOMC) adjusts interest rates to help keep inflation near a 2% target. The FOMC’s preferred measure of inflation is the Price Index for Personal Consumption Expenditures (PCE), primarily because it covers a broad range of prices and picks up shifts in consumer behavior. The Fed also focuses on core inflation measures, which strip out volatile food and energy categories that are less…

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Medicare and Your Employer Health Plan

If you plan to continue working after you reach age 65, you may be wondering how Medicare coordinates with your employer’s group health plan. When you’re eligible for both types of coverage, you’ll need to consider the benefits and costs, and navigate an array of rules. How does Medicare work with your group health plan? You can generally wait to enroll in Medicare if you have group health insurance through your employer or your spouse’s employer. Most employers can’t…

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