Nevin's Data "Points"

There is a “common wisdom” in our business that suggests that all plan sponsors are, more or less, alike; that large plans are the inevitable early adopters of trends that, sooner or later, trickle down to plans of all sizes. Consequently, those who make their living trying to discern trends and patterns frequently focus on the behaviors in evidence at larger programs—figuring that, in three years or so, those same characteristics will emerge across the spectrum. There’s some logic to that perspective—and at least anecdotal evidence to support it. Human beings—including plan fiduciaries—frequently draw comfort and solace from the experience of others, and smaller programs can hardly be faulted for adopting plan designs and approaches that have been “vetted” by programs with more copious resources. Sure enough, there are areas in which larger programs once dominated—but over time those variances have disappeared. For example, according to the Plan Sponsor Council of 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1926, retirees holding a portfolio that consisted 50% of stocks and 50% of fixed-income securities could have safely withdrawn an annual amount equal to 4% of their original assets, adjusted for inflation without… running out of money.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...

Life has many lessons to teach us, some more painful than others – and some we’d just as soon be spared. But as graduates everywhere look ahead to the next chapter in their lives, it seems a good time to reflect on some of the lessons we’ve learned. Here are some nuggets I’ve picked up along the way…. Be willing to take all the blame – and to share the credit. There actually are stupid questions. Shun those who are cruel – and don’t laugh at their “jokes.” Never say you’ll never. Be on time. “Bad” people eventually get what’s coming to them. But you may not be there to see it. Always sleep on big decisions. Sometimes the grass looks greener because of the amount of fertilizer. Never email in anger – or frustration. And be extra careful when using the “Reply All” button. If your current boss doesn’t want to hear the truth, it may be time to look for a new one. Never pass up a chance to say “thank you.” If you wouldn’t want your mother to learn about it, don’t do it....

To judge by the headlines, if there’s anybody in more trouble when it comes to retirement planning than Boomers, it’s Millennials. But are they really? Consider this: Millennials are saving for retirement – likely earlier, and at higher rates than you did when you were their age. I’ve seen a number of surveys that suggest that Millennials are, in fact, saving earlier – and saving at higher rates than their Boomer parents. A recent Natixis survey says that on average, Millennials first enrolled in a retirement savings plan at age 23, while Boomers didn’t until 31. Another – this one by Ramsey Solutions – finds 58% of Millennials are actively saving for retirement, and they began saving at an average age of 23. Consider also that, of the Millennials who are actively saving, 39% set aside up to 9% of their income for retirement — $5,000 of the average annual Millennial household income of $55,200. This higher and earlier rate of saving exists despite high levels of college debt...