Nevin's Data "Points"

I only discussed retirement investments with my dad once, and the conversation didn’t take place until he had already decided to retire. He had a pretty good idea about what he wanted to do – he just couldn’t figure out how to accomplish that via the all-too-typically complicated distribution request form. Consequently, at my mother’s instigation, he called in an “interpreter” – in this case, the son with the law degree. It was a complicated discussion. Since hundreds of miles separated us, he had to read the form to me (I suggested faxing, but that was “more trouble than it was worth”; I chose to assume that was a reference to his difficulty with operating the fax machine on his end, and not the quality of advice he was hoping to get from mine). Fortunately, there is something of a boilerplate design to most of these forms and, in reasonably short order, I was able to wrest an English version of his options from the document. Having outlined the options for him, I asked him if he ...

One of the “promises” of the newly enacted Pension Protection Act of 2006 (PPA) is that it will foster, if not encourage, greater levels of retirement plan participation. And while there are several areas that ostensibly facilitate this growth – notably the removal of EGTRRA’s sunset provisions and the expansion of investment advice – the thing that is really supposed to make a difference is automatic enrollment. So, how does the PPA encourage automatic enrollment? First, it resolves the current dilemma faced by plan sponsors in states that prohibit (or appear to) deductions from a worker’s pay without their explicit permission. While this has been a relatively recent concern, the certainty that federal, not state, law governs these transactions is a welcome relief, and one that is provided immediately. Will it persuade employers who were not already actively considering automatic enrollment? Probably not. The PPA also lays the groundwork for some much-anticipated clarity from the Depa...

About a week ago, a friend of mine asked me how my retirement plan investments were doing. Now, we’ve had conversations about asset allocation from time to time over the years – we’ve even compared “answers” on our individual 401(k) plan choices – so it wasn’t as though the question was out of left field. The truth was, I hadn’t checked on them since early July – but I answered, “OK, I suppose – why?” As I waited for his response, two obvious answers to my question popped into my head. Either his account returns were sizzling, and he wanted to rub that in, or his account returns were not-so-impressive, and he was looking for some reassurance on the choices he had made in his account (that he was merely interested in the status of my retirement savings account didn’t really seem plausible under the circumstances). Then, I remembered – the last investment choice he made was to invest in a lifestyle fund – and, sure enough, he wasn’t thrilled with his return. There have been several s...

During our recent family vacation, I decided to add the GPS (global positioning satellite) option to our rental vehicle. While I have never had one in my personal car, we were going to be traveling in some VERY unfamiliar territory, and at hours of the day when I didn’t want to be trying to read maps, much less trying to guess how far to the next gasoline station in the middle of nowhere. Over the long haul, it was a godsend. We got clear, quick, and for the very most part, accurate, directions to just about every location on our itinerary. Just about. Basically, the longer it had to react to the destination, the better it did. In close quarters – urban settings where the streets come up on you faster, and the opportunities to turn somewhat limited by traffic restrictions – well, let’s just say that my wife understands how I drive, and how I need to be directed - better than the satellites circling the earth, communicating with my car. The analogy isn’t perfect, but when it comes...