Tag Archives: retirement

The Stock Market: Three Days Post Election

FRIDAY 10:30 AM. The graph is obvious. Three days after the reelection of Barack Obama the stock market is still reeling. The media is blaming it on European challenges and a built in cushion because so many expected Romney to win the election. Pad it as they may, the stock market is now facing the reality of the ‘fiscal cliff’ and a tax and spend president. Only gold owners are smiling today.

This is November. The fiscal cliff is the sequestration or automatic cuts that Congress agreed on that would happen if they could not find a way to stem our ever growing debt. Concerns about the impact of the fiscal cliff were highlighted Thursday in a report from the Congressional Budget Office. If fully implemented, the U.S. economy is expected to shrink by 0.5% in 2013 and the unemployment rate  rise to 9.1% from 7.9%.  Lower growth and higher unemployment combined with continued rising costs could put the country back into a depression.

Many middle class Americans wonder how this will affect them. Of course, everyone will feel the impact of higher goods costs. Most everyone knows someone who has struggled to find a job in this economy. More often people think the Stock Market ups and downs are only important to the wealthy. But retirement programs and 401Ks often are invested in the market and drops in market value can translate to dramatic changes in retirement plans.

Today the president will speak about his ideas to bridge this fiscal cliff. No doubt he will express hope that the Republican controlled House of Representatives will agree to his plans. Maybe the president will offer an outstretched hand rather than his snide “elections have consequences” remark of  his first term. And if that happens maybe the market will react in a positive direction.


We should all be watching closely.


Retirement Planning at 40-Something – Halftime of the Big Game

LUBBOCK, Texas, Sept. 11, 2012  — If you started retirement planning early in your career, it’s good news by the time you hit your 40s. But for those 40-somethings just thinking about retirement – it’s like halftime in a football game.

Since football season is upon us, we’ll use the gridiron analogy. Let’s face it; working in your 40s really is like halftime in the big game. Your career is about half over, and it’s time to stop the game, assess where you are and make any necessary adjustments to your plan. You have 20 years of work behind you, and roughly 20 years of work ahead. If you haven’t been saving for retirement, it’s time to get started. If you’ve been socking money away for years, then it’s a good time to reassess where you are, and what you need to do over the next 20 years.

“Now more than ever, it’s important to have both an offensive and a defensive game plan,” said Brian Pitaniello, a partner with PFG Advisors. “In your 40s, you still need to have an offensive strategy to continue building dollars for the future. On the flip side, a defensive strategy is still just as important to have in place for the possibility of premature death, disability, economic crises and other unforeseen financial needs.

“Just like any football game, you have to have that half-time ‘locker-room talk’ about preparing for the worst but hitting the field with the mentality – and the tools – for ultimate success.”

Pitaniello explained that if you’ve been ignoring retirement for some reason, or delayed facing the reality that you may one day be retired, then now is the time to act. It’s halftime. It’s time to regroup and prepare yourself for the second half of your career. No matter the age you begin, Pitaniello and PFG Advisors recommend the following checklist in creating a retirement strategy:

  • Plan – At this point in your career, you should have an excellent feel for when you’d like to retire, how much you need in those retirement years, and where your current career is likely to take you. For that reason, you should be able to create a very accurate retirement plan.
  • Do – At 40-something there is simply no time to waste. Once you’ve figured out what you need to do; just do it.
  • Check – If you’re playing catch up, then you’re going to need to check your retirement plan every two years or so. Because of the relatively short time between now and when you retire, you need to pay close attention to things such as the return on your investments to make sure they agree with your planning assumptions.
  • Act – As you check your plan, you may need to make adjustments to things such as retirement age and your rate of savings. Since you have half your career behind you, during each of these cycles you should only be tweaking your retirement plan.

Barney Frank Ruins Mayan Expert's Big Break On TV

Barney Frank announced that he wasn’t running for re-election yesterday, and it’s almost like you could see the rays of sunlight beaming down on him while an angel’s chorus sang out, right?  A lot of people were happy that he made his announcement yesterday, but do you know who wasn’t?  This guy:

Arthur Demarest got to talk for about 18 seconds, before the news anchor cut him off to cover Barney Frank’s retirement announcement, and that’s just sad.  You can see that he went through a lot of trouble to come on and talk about the Mayan Calendar; it broke my heart.  There’s Arthur, all dressed up in a nice jacket.  He’s got a scenic skyline pictured behind him.  Here he was about to have his big break.  He was going to talk about the Mayan Calendar on America’s largest news channel, and then… BAM.  He gets “Franked”.  Barney Frank pulls the rug right out from under him.

Well, don’t worry, Arthur.  You’re not the first person that Barney’s Franked.  But hopefully, you’ll be the last, now that he’s getting out of Congress.  He’s done enough harm, and at one point or another, Barney’s Franked us all.

What are your thoughts on the distinguished congressmen’s retirement?  And what about poor Arthur?  Should he be invited back on?  Let us know your thoughts in the comments below.  And as always, gobble gobble.  (or something like that.. this holiday weekend was a bit too long)

Note:  “Franked” refers to Barney’s self-centered and self-serving policies that have harmed our nation over the years, and is not intended as a euphemism.

Feds Targeted for $600M in Improper Retirement Payments

“Feds Targeted for $600M in Improper Retirement Payments”

An Extremely Deceiving Headline

By Dell Hill

When Fox News first reported this story, the $600 million dollar figure jumped right off the page and slapped me up-side the head. Six hundred million is a LOT of money. But, as it turns out, that headline is extremely deceiving. The $600 million they refer to only covers the last five years! Can you just imagine what the REAL total of illegally obtained retirement benefits might be? It has to be in in the “many billions of dollars” category.

When you toss in the fact that this loss of revenue didn’t reach a numeric threshold to be reported; well, sir, we have yet another major issue to deal with inside the Beltway, and it’s a mighty expensive one.

“The inspector for the Office of Personnel Management — the department responsible for civil service employees — said in a report published last week that OPM’s Civil Service Retirement and Disability Fund is now in the process of trying to implement a recovery plan for some of the payments.

“The amount of post-death improper payments is consistently $100-$150 million annually, totaling over $601 million in the last five years. In addition, the balance due the government related to these improper post-death payments during the last five years has risen much faster (70%) than total annuity payments (19%),” wrote Inspector General Patrick E. McFarland.”

The crux of the problem seems to be the failure to report the death of legitimate benefits recipients, or the government’s failure to act on death reports and stop the monthly payments from being mailed. In one case, the son of a beneficiary kept receiving – and cashing – his deceased father’s checks, totalling $515,000, for an unbelievable 37 years after his death. And this fact was only revealed when the son died in 2008. Not one thin dime of that $515,000 is recoverable.

One other such case resulted in $1.2 million dollars in federal retirement checks being cashed AFTER the legitimate beneficiary had died.

In what appears to be an effort to soften the blow, the Inspector General said that by comparison OPM’s improper payouts are lower than federal benefit programs, which only means that the problem there is likely to be even greater!

Getting timelier notice of death, comparing annuitants’ Social Security numbers against a master file of deaths, and tracking undelivered IRS form 1099R forms, which report annuity payment income, are among the Inspector Generals’ 14 recommendations to address the problem.

We invite you to read the Inspector Generals formal report by clicking right here (.pdf file).

New Mobile Technology Transforms How America’s Workers Save for Retirement

Innovative Financial Advisors pilot cutting-edge process resulting in dramatic improvements in retirement savings

SANTA ROSA, Calif., Aug. 31, 2011 — According to The Employee Benefit Research Institute, in their 2011 Retirement Confidence Study, fully 70 percent of American workers say they are not where they need to be with their retirement savings.

Less than half of workers (42 percent) report they and/or their spouse have tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement. This has changed little since 2003.

But since December 2010, a start-up company has been piloting a solution to overcome these unmet needs with Financial Advisors who specialize in 401(k) plans.

Called iJoin, this mobile software provides personalized analysis of a worker’s retirement situation. Workers using their own smartphone or a supplied mobile device are led through an engaging, interactive decision-making process. Using applied behavioral finance techniques; iJoin gently nudges employees to determine:

  • How much must they save for retirement to replace their monthly income?
  • If they are not on track to achieve their monthly income goal, what they can do to achieve the desired goal?
  • Based on their individual preferences, what are some suitable investments?

With a professional Financial Advisor leading the session, different situations can be analyzed and solutions provided on the spot. At the end of the session, a retirement planning report is emailed to each participant.

Nearly 200 workers participated, with 8 companies across the country, in a variety of industries ranging from professional firms to farming equipment and manufacturing. The results were outstanding:

  • 97% chose to participate in their company retirement plan compared to industry average of 78.8%
  • 68% selected a higher contribution percentage than what they were currently deferring
  • Workers increased their savings or deferral rate resulting in a 10.6% average deferral rate compared to industry average of 7.5%

Workers gave the iJoin software good marks:

  • 76% rated iJoin as “Extremely Effective” or “Very Effective” in helping determine how much money will be needed in retirement
  • 81% said they would “Absolutely” or “Probably Recommend” the iJoin retirement planning process to others.

“The mission of iJoin is to improve the retirement security of millions of American workers who are depending on 401(k) plans to generate needed income once they stop working. Mobile technology is a game changer. By partnering with Financial Advisors, iJoin offers a turnkey technology solution and consistent guidance process that dramatically improves individual retirement outcomes,” said Fred Greenstein, CEO, Left Coast Solutions, Inc.

“In about twenty minutes, the iJoin mobile application enabled workers to determine how much they needed to save for retirement and showed them how to accomplish that goal,” said Kendall Kay, Chief Marketing Officer for iJoin. “They now have a written game plan that shows how they can be ready for retirement and what sort of monthly income they will need. This process really boosts their confidence.”

About Left Coast Solutions, Inc.

Established in 2008, in Santa Rosa, California, Left Coast Solutions is the owner of the iJoin mobile web guidance and enrollment software. The software has been developed by LCS’s technology and project partner iGate/Patni. The iJoin team has 70+ years of retirement plan experience. The founders possess expertise in 401(k) recordkeeping, product development, investment management, web technology, retirement plan design and consulting. For more information, go to: http://www.ijoinplan.com/

About iGATE Patni:

“iGATE Patni” (the common brand identity of iGATE and Patni with the former having acquired a majority stake in Patni Computers) provides consulting, technology, business process outsourcing and product engineering services on a Business Outcomes-based model powered by the iTOPS (Integrated Technology and Operations) platform. iGATE Patni’s multi-location global organization has 26000+ people, servicing over 360 Fortune 1000 clients in banking & financial services; insurance & healthcare; and life sciences, among others. Visit: http://www.igatepatni.com.


Kendall Kay
Chief Marketing Officer
Left Coast Solutions, Inc.
[email protected]

Tax Expert’s Advice: Don’t Count on Social Security

BRENTWOOD, Tenn., July 1, 2011 — According to a poll taken earlier this year, 77 percent of voters think Social Security is in danger. Fewer Americans, however, approve of increasing the retirement age. Voters were split on permitting people to invest their Social Security taxes into personal retirement accounts.

Tax expert Dr. Friday, aka “The Tax Doctor,” falls into the camp of doubters. “I don’t look to the government to be there for me; I don’t think anyone our age (30s-40s) should,” says Dr. Friday.

The good news, she says, is that “it’s never too late to start saving. The key is to find retirement plans with immediate tax benefits.” She recommends a disciplined savings plan, and her site, DrFriday.com, has an online guide to determine how much one should put away each month.

Dr. Friday outlines steps for retirement savings:

  • Get out of debt so you can live on less than you make and actually save.
  • Start saving once you have no high-interest credit cards/loans to pay off.
  • Open a money market account and keep three to six months of living expenses in it for emergencies.
  • Max out one or in some cases two of the following – IRA, Roth IRA, Simplified Employee Pension Plan (SEP), 401(k) or 403(b).

Dr. Friday’s advice is sound, considering proposals to cut Social Security benefits. The American Association of Retired Persons (AARP), the lobby for older Americans, has been considered one of the leading opponents of cuts. However, the group recently indicated it was open to modest reductions in benefits for future recipients.

Darrell Payne, a public affairs specialist with the Social Security Administration, recently was interviewed by Dr. Friday and co-host Hank Parrott on the “Retirement Report” on Nashville’s Channel 5+. When asked about the solvency of Social Security, he said, “We’ll have enough money to last until 2037.”

“Social Security was designed after the Great Depression when people didn’t have any money,” says Dr. Friday. “It wasn’t designed to be your sole support for retirement.”

For more information on Social Security, visit http://www.ssa.gov. For more information on Dr. Friday’s financial services – including tax returns, retirement planning and business accounting – visit http://www.drfriday.com.

Darning The National Fabric

DebtOur country is stumbling blindly down an unsustainable path. While much is being made about the National Debt and how it is damaging our grand children’s futures, there is a much larger problem. Personal debt is destroying our national fabric as we speak. It is easy to understand the dangers of $14 trillion dollars worth of debt—but is it not just as scary to carry $14,750 in credit card debt with an APR of 14.67%? Personal debt is the greatest threat to ever face our nation. Americans must break past our normal thoughts on debt, understand the danger debt poses and build a strategy to end it.

From a purely lifestyle standpoint, personal debt is a significant problem. It is a negative force in such aspects of our lives as marriage and career choices. An ehow Family article discusses how debt plays in troubled marriages.

According to the SmartMoney study, the No. 1 starter of fights in marriages is the debt topic. Couples who are unable to reconcile their differences about debt — with one partner fearing financial failure or legal consequences from marital partners’ excessive debt — may seek to dissolve their marriage rather than risk insolvency or compromise.

From a career perspective, take a young college graduate. Having just completed his degree (one can tell from the nearly $20,000 in debt), college loans are no longer feeding him cash – they expect him to start paying it back. He needs a job, any job and quick. That same pressure applies throughout life – as long as money is owed to someone else you are enslaved. You don’t like your job, but you have $20,000 in credit card debt – you can’t take the risk of starting that business you always wanted to run or taking that cool position at a start-up. Your debt has become your master.

A married couple without a defined benefit plan both at retirement and nearing retirement had more than a nine-in-ten likelihood of outliving their financial assets in July 2008. After the market declines, their retirement vulnerability increased even further to a 19-out-of-20 chance.

Ernst & Young LLP June 2009

A 2009 Ernst and Young survey conducted for American for  Secure Retirement showed couples nearing retirement with only a 4% chance of not outliving their assets. That means there’s a 96% probability that Americans over age 50 will run out of money before they run out of life.  If YOU want to be successful, you CAN NOT be like the 96%. It is all about behavior; you must be different. You must swim against the stream–and that means NOT having car payments, not buying a new car or replacing your car ever 6 years because it needs maintenance. Not taking the advice of the commission-based salesman that says buy the most expensive house you can afford, not taking advice from the banker who says you can spend 2 1/2 times your salary on a home, not listening to the mortgage broker who says your loans and debts can be 42% of your gross salary (Think about that: after taxes and another 40% just how much is left for insurance, gas and groceries? 25? 23%? Is it any wonder that the smallest deviation upsets the apple cart?). Not going ahead and getting it today, because you can finance it interest free for up to one year! We, as a nation, must focus on doing what is right for our future; right now that means living on less than you earn, no matter how much–or how little-that may be.

There is not much time left–we face a choice, as individuals and as a nation, to make these hard choices and do the right thing right now or take one more step down a path that we may never be able to recover.

That buzz you hear is every reader rationalizing and justifying their debt: we had to help your mom, it’s a low rate,  got a great deal on the house. What does ANY of that have to do with the fact that you are paying a fee, monthly, for your past? That tank of gas will cost hundreds of dollars by the time you pay that credit card debt. Can you make plans with friends without checking your balance first? Do you have to turn down a job you’d prefer in order to make enough to pay your student loans? Did they turn down YOU because of your credit? Is your car depreciating faster than its loan? Can you chat with your spouse about money—right now—and walk away happier than before you started?

Are you willing to commit to starting a better life right now?


The Alliance Interview – In-Depth Look into Conservative Alternative to AARP

Dr. Larry Hunter president Alliance for Retirement Prosperity

Dr. Larry Hunter

On Monday, I had the opportunity to spend a little under an hour with the President of  The Alliance for Retirement Prosperity, Dr. Larry Hunter.  Dr. Hunter is a supply-side economist that has worked in the Reagan White House as well as numerous Conservative initiatives such as Empowering America and the Social Security Institute.

On September 15th, Dr. Hunter launched what may be the first credible challenger to AARP’s monopoly on senior citizen and baby boomer advocacy and support.  From the Alliance website, wethealliance.com, their mission statement sums up the organization’s purpose.

The Alliance for Retirement Prosperity Association is an association of advocacy groups (“Allies” or “Alliance Partners”) and their members working to ensure a prosperous, enriched and secure retirement for today’s seniors and the seniors of tomorrow while working in the political arena to promote conservative American values, principles and public policies that affect the quality of our members’ lives.

In talking with Dr. Hunter I wanted to straighten out some conflicting information on the internet about the Alliance for Retirement Prosperity.  Many sites report the Alliance as a 501(c)4, or non-profit and that Dick Armey, Jack Kemp and Dorcas Hardy are co-chairs.  It would seem that this is all ancient history as Dr. Hunter explained that to be a very old press release detailing a past project.

The Alliance is now organized as a for-profit Virginia Business Trust, with Dr. Hunter as the President.  Dr. Hunter explained why a for-profit model is required to compete against AARP:

If we were going to take on AARP, we had to take them on for what they are.  That means you have to have a for profit business who can provide real goods and services to members to compete with them [AARP].

Dr. Hunter went on to explain that many attempts to take on AARP as a non-profit have struggled.  Why would AARP as a non-profit have an advantage over other non-profits?

AARP.org states that their organization is a non-profit

Founded in 1958, AARP is a nonprofit, nonpartisan membership organization that helps people 50 and over improve the quality of their lives.

This statement is fact, AARP is a registered 501(c)4 non-profit organization as far as the law is concerned, but, as an article in the SeniorJournal stated, it’s behavior is not similar to most non-profits.  It sells insurance products to the tune of several hundred million dollars per year and the membership that it’s members pay for is not a traditional membership .. they don’t vote for AARP officers.

In other words, AARP claims non-profit status for tax exemption purposes, but in all truth, appears to operate much like a for-profit organization – that does not have to pay any taxes.  Imagine that, a tax-exempt insurance company?

With the Alliance choosing to engage AARP head-on, how will they offer better and less-expensive products to the 50+ crowd considering AARP’s questionable tax-exempt edge?  Enter: the free market.

According to Dr. Hunter, AARP finds a vendor or carrier and first asks them for an endorsement fee.  Then, for each product or service sold, a “cut” is taken by AARP.  This double-hit is going to be passed on to someone – the members.  These single endorsements might also be costly to the AARP membership as the vendors have little competition within the AARP population.  The practices, as described by Dr. Hunter, do not seem competitive and would seem to limit choice. What pressure is there for these vendors/carriers to keep prices low?  In fact, it seems more of a monopolistic approach wherein an AARP endorsement gives an endorsed vendor a choke-hold on a significant market.

The Alliance is taking a free-market approach.  With a supply-side economist at the helm, could it have gone any other way?  The Alliance is creating an exchange where vendors and carriers will compete for every dollar of Alliance member’s money.  Dr. Hunter goes on to explain the exchange.

We are going to create a real-time shopping model.  In which, we are not going to offer single-endorsed products, we are going to bring in a whole stable of top-of-the line insurance carriers and vendors and then those carriers and vendors are going to compete with each other for our member’s business.

Each vendor will know that they must provide a good quality product at an attractive price or they will be drummed out of the exchange by simple market economics.  As an added differentiator, according to Dr. Hunter, the Alliance will not sell insurance like AARP.  They will have insurance carriers in their competitive exchange for members to choose from.

I shared with Dr. Hunter that several of Conservative Daily News’ readers have emailed or commented that they feel that some of AARP’s programs and discounts are rip-offs and asked him how the Alliance might address these concerns.

I don’t know what [your readers] mean by rip-offs, but what I have seen is that companies will offer a discount.  To get the discount, you have to sign-up with a credit or debit card.  Your credit card or bank account will be hit each month in order to pay for whatever you signed-up for.  Many times, people are signing up for these programs and don’t really understand what they are getting or what they are agreeing to do.  They will come back in a couple months and their credit card has been hit four times. . I can guarantee your readers that we will have none of that.  Our discounts are going to be a coupon- basis.  For example we have a very good restaurant coupon.  If you agree to pay $5 a month for the premium upgrade, you will automatically get a $25.00 restaurant coupon to the restaurant of your choice. .. if anybody comes back to us and says they don’t want to keep doing this .. we’ll give them their money back.

Along with questionable discounts, readers have also mentioned that AARP seemed to be pushing increasingly left-wing policies.  Dr. Hunter even mentioned this AARP town hall video that illustrates how out-of-touch AARP may have become.

This brings out another facet of the Alliance’s competitive strategy against AARP  – policy.

We are pursuing what we call a common sense conservative consensus.  People have been thirsting to join an association that caters to baby boomers and seniors that they find compatible philosophically and politically.

So what policy initiatives would the Alliance be pushing in the near future?  He said that the Alliance won’t get deeply involved in social or foreign policy issues, but did make clear some initiatives they will be pushing:

  • “Do everything in our power to repeal Obamacare .. because it was enacted under false pretenses”
  • Push for across-the-board government spending cuts
  • Push for across-the-board tax cuts
  • Get government back to within Constitutional limits
  • Restore the Constitutionally provided for powers to States

The push for across-the-board spending cuts led to another question – how to cut spending but not gut Medicare and Social Security?  I asked Dr. Hunter if the Alliance would play a part in helping reduce spending and defining that optimal government size.

If we do this the right way, we can protect all the safety net programs from major cuts for current retirees and baby boomers who are about to retire.  Reform the programs for younger workers and cut other government programs.  It is going to be a challenge, no doubt about that.  But, not as much of a challenge as the liberals would have you believe.. we are going to fight like bulldogs against any proposals, Republican or Democrat, to take a hatchet to Medicare [or] Social Security.

Alliance for Retirement Prosperity

Acknowledging that the Alliance represented a policy agenda that should appeal to a broad swath of Conservatives, I asked how someone under the required 50 year old age limit could help the Alliance in it’s goals.

He offered the idea of buying the membership for your parents and upgrade to the family plan so the children of seniors and boomers can also take advantage of the discounts, offers and community forums.

AARP Alternative, Alliance for Retirement Prosperity, to Launch Wednesday

In a press release Monday, the Alliance for Retirement Prosperity announced that it would be announcing the “Conservative Alternative to AARP” on September 15th.

The Alliance offers seniors and boomers a greater choice of products and services, bigger discounts and lower prices than AARP; plus a conservative political philosophy and agenda that will go head to head with AARP’s liberalism in Washington, DC.”– Alliance for Retirement Prosperity Association president Lawrence A. Hunter

Washington, D.C.The Alliance for Retirement Prosperity Association (WeTheAlliance.com) today announced that it will officially launch on September 15, providing seniors and Baby Boomers nationwide, “a true conservative alternative to AARP’s leftwing agenda.”

According to Alliance president, Dr. Lawrence Hunter, “The Alliance will offer seniors more discounts on a wider range of higher quality products and services, along with lower prices and superior customer service than its competitor AARP.”

Alliance for Retirement ProsperityPlus,” Hunter added, “the Alliance also will provide a powerful and effective alternative for seniors and Boomers across the country who are sick and tired of watching AARP spend their hard-earned money on its hard-left agenda.”

The Alliance, a for-profit membership association, intends to segment the market by targeting politically moderate-to-conservative consumers who have become disaffected with AARP. But the new association also plans to appeal to the 80 percent of Americans in the 50+ market place who are not currently affiliated with AARP.

In a recent Wall Street Journal op-ed, Hunter criticized AARP’s endorsement of President Obama’s healthcare makeover, calling it a “betrayal of their members.” Wrote Hunter, “ObamaCare guts Medicare with drastic reductions in doctor and hospital reimbursements that will create havoc and chaos in health care for seniors.”

The Hunter op-ed continued, “The president’s concept of spreading the wealth includes sacking the Medicare system, on which America’s seniors have come to rely for medical care, in favor of others the president’s progressive vision deems more worthy. The president’s pledge that ‘If you like your health plan, you will be able to keep it’ clearly does not apply to America’s seniors.”

Hunter was even more critical of AARP in a New York Daily News commentary taking the controversial group to task for, “selling out seniors in a crass effort to feather its own corporate nest by supporting the draconian cuts to Medicare in order to stimulate demand for its lucrative Medigap supplemental insurance polices that pick up where Medicare leaves off.”

Are You Running Your 401k? Are You Sure?

The Wall Street Journal published an article by Eleanor Laise that highlights an increasing practice by employers.  Taking more-and-more control of employee’s retirement accounts.

“The greater employer control is a philosophical shift in 401(k)s and other defined-contribution plans, which held $3.5 trillion at the end of last year. The new, more-paternalistic approach, with employers making most of the decisions, resembles a defined-benefit pension plan. But unlike a pension plan, individuals bear all the investment risk.”

The author points at a father-figure desire of employers to help employees manage their investments better.  In some cases this might be true, but some of the pressure is coming from the investment firms that manage the money.

“Fund firms and plan providers say the moves are necessary to get hands-off 401(k) savers on track for a secure retirement. Left to their own devices, some workers invest far too conservatively, others too aggressively, and many don’t save nearly enough.”

The real risk is that employers will not consider each investor and make broad-stroke moves that could pull some investors out of aggressive funds at a bottom or move them to more-conservative funds at the top of a cycle potentially creating devastating losses or preventing natural recovery of a battered fund.

“Indeed, many participants were moved from conservative stable-value funds to stock-heavy target-date funds last year as their employers switched default investments, exposing people to losses that they may not have otherwise suffered”

These typical target date funds have a date that is intended to mark when the investor will retire.  The investment mix in the fund is intended to be less-aggressive as the target-date approaches.  Unfortunately, the market is not only volatile while we are young.  In the case of last years financial collapse, being able to jump into a stable-value or other conservative investment could have benefits the 20-somethings as well as the 50-somethings.

Take a look at your 401k and make sure that you are truly the one running it.