If you participate in a 401(k), ESOP, or other qualified retirement plan that lets you invest in your employer's stock, you need to know about net unrealized appreciation--a simple tax deferral opportunity with an unfortunately complicated name.
Investment behavior of retirement investors historically consistent, regardless of stock market direction, glide path type, or time horizon
- The savings behavior of target date strategy investors in workplace retirement plans has been consistent over time, even during episodic stock market declines.
Investors tend to see short-term volatility as the enemy. Volatility may lead many investors to move money out of the market and “sit on the sidelines” until things “calm down.” Although this approach may appear to solve one problem, it creates several others:
Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios.
The value difference between an optimized plan and claiming early
Many advisors venture into the Social Security planning world after interfacing with an article or a calculator that identifies the value difference between claiming early and some optimized strategy that includes the delay of at least one member of the couple’s benefit. The value difference can be striking, often from tens to hundreds of thousands of dollars.1
When it comes to retirement, most people aren't.
Studies show that some 75% of all Americans reaching retirement age have less than $30,000 socked away to take them through their golden years. And when you consider that people will need about twenty times their annual income to maintain their standard of living, for those folks the future looks bleak indeed.
In recent years, retirement plan sponsors and plan providers have been evaluating the effects of a low interest rate environment on participants' retirement income adequacy. In many cases, sponsors have begun exploring plan design strategies that encourage participants to save more for retirement. One of the strategies being discussed is restructuring employer matching contributions.