The Partners Circle

Are you in the final countdown to retirement? Congratulations! This can be an amazing time full of new opportunities. Put yourself in the best position possible for your next adventure with these seven retirement readiness tips. 1. Revamp your budget.If you’re retiring soon, some expenses will likely go up — like medical and travel. But others will probably go down. You may not need to spend as much on clothes for work, and you may not even need a second car if you’re married. If you’re going to lose employee-sponsored health insurance and are not yet Medicare eligible, you’ll have to budget for purchasing insurance privately or buying it through one of the Affordable Care Act exchanges. And while you may have hoped to have all your debt paid off before retirement, unfortunately for many this is not the case. But you should at least audit all your debt including:...

By age 30, college grads with student loans have half as much saved for retirement as those with no loans, according to research from Boston College. It’s important not to sacrifice retirement goals at the expense of paying down student debt. But to do so, you need to step back and look at the big picture. Delaying saving for retirement can have disastrous consequences. First, there’s an opportunity cost for sitting on the sidelines — and young people have the most to lose due to the longer investment horizon their age allows for. Second, not participating in a company-sponsored 401(k) plan and taking maximum advantage of any company match is “leaving money on the table.” You want to save for your future, but you also want to get that monkey off your back, so what are you supposed to do? You probably have to find a way to do both....

A report by Federal Reserve economist Joanna Stavins combined Equifax data with the 2015-2016 Federal Reserve Bank of Boston’s Survey of Consumer Payment Choice(SCPC)on how consumers pay for purchases. Comparing self-reported measures with objective data, she found that people tend to have fewer credit cards with higher limits than they report. According to her research, it’s estimated that 44% of adults have revolving credit that they don’t pay off in full each month with an average balance of $6600. The study also included average credit card balances for various age brackets. Debt is becoming an increasingly larger part of the financial planning landscape. And it has different implications at different ages. Here are the average balances for each age group in the study and how carrying debt can impact them at each phase of life. Age <25: The average credit card debt for this age group is $2340*. You may...

Target date funds (TDFs) have grown increasingly popular since their inception over two decades ago. In fact, 72% of retirement plans have TDFs as their default option and more than 40% of retirement plan account holders use a TDF. With so many employees invested in Target date funds, it’s important to understand how they tend to behave in markets under pressure and their likelihood to adhere to a long-term investment strategy. The good news for plan sponsors with TDFs under management is that those invested in them tend to stay put — even during volatile and declining markets. A recent study by Fidelity examined the behavior of their TDF investors during two particularly volatile periods of the stock market: the 2007-2009 bear market and the 2015 downturn. They found that TDF investors tended to maintain consistent savings behavior and retain their market exposures during both of these declines. Interestingly, even...

Recent Department of Labor (DOL) letters have threatened sanctions against plan fiduciaries for potential Employee Retirement Income Security Act (ERISA) violations regarding the handling of missing participants. The DOL also cited potential violations involving the timeliness of required minimum distributions for participants nearing the age of 701/2. This occurred despite a lack of clear-cut guidance from the DOL regarding best practices and appropriate administrative procedures for handling instances where prior employees cannot readily be located. As a result, plan sponsors have been required by Labor Department auditors to follow procedures regarding required minimum distributions (RMDs) not documented from any previous formal guidance. In response to concerns expressed by plan sponsors, the Internal Revenue Service, DOL and Pension Benefit Guaranty Corp. (PBGC) have released guidance regarding the steps plan sponsors and administrators should take when attempting to locate separated participants, including: Searching plan, employer, sponsor or other publically available sources of...