August 2018

US. The Call to Care for Aging Parents Comes Sooner Now

Adrienne Glusman was 29, single and carefree when she became her mother’s caregiver. The only child of divorced parents, Ms. Glusman was living in New York City at the time, working, traveling, and going out with friends. Her mother, Hetty, in her mid-60s, was retired and living in Florida when she was diagnosed with Parkinson’s disease. It seemed manageable, until she fell, hit her head and wasn’t discovered for 12 hours. Read more The wall street journal

UK pension industry faces transparency inquiry

As Australia’s superannuation industry undergoes its own grilling at the Royal Commission, the UK Government has announced the Commons Select Committee will hold an inquiry into pension costs and transparency. The inquiry would examine whether the pensions industry provides sufficient transparency around charges, investment strategy and performance to consumers. It comes off the back of the Committee’s recent inquiry into pension freedom and choice, which found that some scheme members were being “shamelessly bamboozled” into signing up to unsuitable ongoing adviser...

Australia. Two regulators are enough – perhaps more than enough

It is tempting to join the media pile-on about the Australian Prudential Regulation Authority’s apparent lack of action on underperforming superannuation funds, but in terms of true legal powers, the regulator appears to have more bark than bite. This point will probably loom large in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’s fifth round of hearings. This latest round began yesterday and will put the focus on superannuation for a fortnight. We know APRA and the...

UK. Investing for the 100-year life: How to model income in retirement

Financial planning experts have urged advisers to stay up to date with how they model income in retirement as life expectancy, health and working patterns continue to shift among the older population. In the first of our new roundtables with Vitality as part of our Value Exchange project, we gathered specialists in cashflow planning, behavioural economics and financial education to discuss how advisers can meet the challenges of clients banks that are living healthier, and living healthier for longer. Founder of...

Nigeria. Why some retirees earn lower pensions

Pensions earned by a retiree under the Contributory Pension Scheme can be affected by the number of years the worker must have made contributions into the Retirement Savings Accounts. The Managing Director, IEI-Anchor Pensions, Mr Glory Etaduovie, said this while making a presentation on the pension industry in Lagos. He said, “There appears to be a dislike by some civil servants for the Contributory Pension Scheme because it is thought that it pays lower than the defined benefits scheme. This leads...

US. 1 in 3 millennials tapped retirement funds for a down payment, study says

Millennials want their dream home. Fifty-six percent of the millennials polled in a new survey from the Bank of the West said owning a home was more of a priority than paying off debt or retiring comfortably. The survey, which included more than 1,000 people, also found that nearly one in three millennial homeowners borrowed money from their retirement funds for a down payment. Is this a smart financial strategy? Justin Moundas, a real estate agent with Douglas Elliman in Manhassat,...

Most Americans plan to own homes in retirement, but that might be a mistake

We all have our own respective visions of what life in retirement will look like. For the bulk of Americans, however, that means owning a home. In fact, 85% of current workers say they plan to own during their golden years, according to new data from Voya Financial, while 79% of current retirees are property owners. But while owning during retirement has its benefits, there's one major drawback to also be aware of. Why own during retirement? There are several good...

US. Why Owning A Home Can Be A Valuable Retirement Asset

Is home ownership a mistake in retirement? That’s what this article in USA Today claims. In continuing the theme of my last article about not believing everything you read in personal finance, let’s look at some reasons why owning a home free and clear of a mortgage can be one of the best assets you can have in retirement: Your variable costs are lower As the article points out, it’s true that property taxes and maintenance costs increase over time with...

Self-Insurance Against Natural Disasters: The Use of Pension Funds in Pacific Island Countries

By Si Guo (International Monetary Fund (IMF)) & Futoshi Narita Pacific island countries are exposed to significant risks from natural disasters. As adisaster relief measure, Fiji allowed pre-retirement pension withdrawls in the wake ofCyclone Winston in 2016. Motivated by this policy action, we provide a normativeanalysis of the use of early pension withdrawals after disasters, by setting up a life-cyclesaving model with myopic households facing large natural disaster shocks. The modeldemonstrates the key trade-off between building up sufficient retirement savings...

Working Beyond 65 in Ireland

By Anne Nolan (Options Ltd) & Alan Barrett (Economic and Social Research Institute; IZA Institute of Labor Economics) Extending working lives is often proposed as one route through which the costs associated with population ageing can be managed. In that context, understanding who currently works for longer can help policymakers to design policies to facilitate longer working. In particular, it is important to know if longer working is a choice or a necessity, where necessity arises from a lack of...