Nevin's Data "Points"

  It’s long been noted that inertia is a powerful force regarding behavioral finance and automatic enrollment — but it may have limits, according to a new study. Coverage of the report — titled “ Smaller than We Thought?  The Effect of Automatic Savings Policies ” — focused on how job change undermines retirement savings — both because of vesting, as well as the effectiveness of automatic enrollment, and more specifically auto-escalation, since those mechanisms tend to reset with the change in employers (and payroll).    Don’t get me wrong. The report states quite clearly that these automatic mechanisms provide a positive result — the authors comment only that it’s perhaps not quite as positive as most think.  Their solution — give people less access to these monies before retirement, and require savings, rather than permitting an opt-out.  From a pure mathematical stance, there’s little argument there — making people save and prohibiting pre-retiremen...

On what turned out to be the longest day of 2024, I said good-bye to my dear 94-year-old mother. It wasn’t how any of us had planned to spend that day. Two days earlier, she was returning from getting new hearing aids with my sister when she slipped and fell — broke her femur, sending her to the hospital for what was to be a weekend surgery. Mom was amazingly self-sufficient — still living on her own (with some assistance from my sister, who lives nearby) — and she had gone through heart valve replacement and a pacemaker — with COVID in between those two years back. But this time, as is often the case with older folks, the trauma to her body was more than she could fight off. Thankfully, she managed to hang on until her kids (including this one) and several grandkids were able to get to Chicago to be with her as she went to be with the Lord.     I moved out — and my parents moved for my Dad’s new job — just as I graduated college.  My parents (and three siblings) liv...

  This is the time of year when resolutions for the cessation of bad behaviors and the beginning of better ones are in vogue. Here are five for plan fiduciaries for 2025. Develop a (plan) budget. Most financially-focused New Year’s Resolutions focus on spending (less) or saving (more) —and the really thoughtful ones do both — all tied around the development of a budget that aligns what we have to spend with what we actually spend. I expect that most, or at least many, plans also have a budget when it comes to the expenditures that require corporate funding.  Less clear is how many establish some kind of budget when it comes to what participants have to spend.  Now, granted, what they pay will vary based on any number of …variables — but an essential part of ensuring that the fees paid by the plan (for the services provided to the plan) is knowing how much — and for what. At some level that means not only keeping an eye on things like expense ratios, the options with reven...