Nevin's Data "Points"

“You better watch out, you better not cry, you better not pout…” Those are, of course, the opening lyrics to that holiday classic, “Santa Claus is Coming to Town.” And while the tune is jaunty enough, the message—that there’s some kind of elfin “eye in the sky” keeping tabs on us has always struck me as just a little bit… creepy. That said, once upon a time, as Christmas neared, it was not uncommon for my wife and I to caution our occasionally misbehaving brood that  they  had best be attentive to how their (not uncommon) misbehaviors might be viewed by the big guy at the North Pole. In support of that notion, a few years back—well, now it’s quite a few years back—when my kids still believed in the (SPOILER ALERT) reality of Santa Claus, we discovered an ingenious website [i]  that purported to offer a real-time assessment of their “naughty or nice” status. Indeed, no amount of parental threats or admonishments—in fact, nothing we ever said or did— ever ...

As human beings, we’re often motivated to seek simpler solutions to life’s challenges. But sometimes “simpler”… isn’t.  While there are some amazing bundled solutions, ERISA’s admonition to act solely in the interests of plan participants (and beneficiaries), alongside the requirement that those be reasonable in terms of cost and value, call for a careful and considered evaluation.  In that vein, there are some “myths” that seem to be prevalent regarding those choices, perceptions that persist even today. Here are some points to consider: An unbundled approach is more expensive. The reality is, it can be—depending on the point of comparison. If all other things are “equal,” then certainly engaging another level of service and compliance oversight can bring with it additional costs. Then again, engaging the services of a third-party administrator [i]  (TPA)—at least the right TPA—is hardly an “all other things equal” comparison. Their involvement and ...

There’s nothing like the NAPA 401(k) Summit—particularly being  at  the NAPA 401(k) Summit after the many months and a worldwide pandemic that kept us all apart.  Each year for the past four years we’ve taken advantage of that gathering (including in 2020 when we gathered “virtually”) to reach out [i]  to the nation’s top retirement plan advisors to glean their perspective on a wide range of issues relating to their practice—and practices.  This year’s  Summit Insider  was no exception—as we “consulted” with more than 500 retirement plan advisors and home office staff on a range of issues—the criteria in selecting—and rejecting—key business relationships, the things that are over-hyped—and the things that no one is talking about—but that everyone, at least in the eyes of these “Insiders,” should be. We also got some insights on retirement income, important features in choosing target-date funds, rollovers and outcomes.  We’ve included a...

 A recent white paper has garnered a lot of discussion by casting “shade” on a traditional premise about retirement plan withdrawals. The premise—a so-called “rule of thumb [i] ”—isn’t all that old, actually; it dates back only to 1994, when financial planner William Bengen [ii]  claimed that over every rolling 30-year time horizon since 1926, retirees holding a portfolio that consisted 50% of stocks and 50% of fixed-income securities could have safely withdrawn an annual amount equal to 4% of their original assets, adjusted for inflation without… running out of money.  That said, even though it was predicated on a number of assumptions that might not be true in the real world—a 30-year withdrawal period, a 50/50 portfolio mix of stocks and bonds, assumptions about inflation—oh, and a schedule of withdrawals unaltered by life’s changing circumstances (not to mention a 90% probability of success)—a recent Morningstar  paper  challenged its conclusio...