August 2018

10Aug

US. How Automation Will Affect Unfunded Pension Liabilities

In 2016, Deloitte Consulting and Oxford University did a study of public employees in the United Kingdom and estimated that up to 16% (almost 1 million jobs) could be eliminated by automation in the next twelve years. I think this is a wild underestimation. In the U.S. military, we call it the tooth to tail ratio—how many people does it take in the rear (the “tail”), to keep the individual fighter locating, closing with, and destroying the enemy (the “tooth”)....

August 10, 2018
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09Aug

US. Here’s What Happens To Your 401(k) When You Leave Your Job

Let’s face it: Nowadays, most workers don’t stay in the same job or work for the same company for the duration of their careers. But what happens if you funded a 401(k) and then switch jobs, leave your company or get laid off? What happens to the money you accumulated when you move on? The important thing to know is you get to decide what happens to it. Here are some of your options, assuming you are too young to...

August 9, 2018
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09Aug

US. Few in Temporary or Alternative Jobs Have Access to Employer-Provided Retirement Plans

Contingent workers—those who provide services on a short-term or temporary basis—are much less likely than traditional workers to have a retirement plan at work, according to data released recently by the federal Bureau of Labor Statistics (BLS). According to the bureau, 23.4 percent of contingent workers were eligible for—or had access to—employer-sponsored pension or retirement plans in 2017. This is about half the rate for more permanent or traditional workers, among whom 47.6 percent were eligible for an employer-sponsored plan....

August 9, 2018
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08Aug

US. The stealth pension mortgage on your house

States with unfunded public employee retirement obligations will have to rely on real estate property as their ultimate collateral to deal with the risk, writes experts on The Wall Street Journal. "The affluent can escape sales and income taxes by moving to a new state—but real estate stays behind," explain the experts. "Property values must ultimately support the obligations that politicians have promised, even if those obligations aren’t properly funded... Whether or not unfunded obligations are paid with property...

August 8, 2018
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06Aug

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,...

August 6, 2018
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06Aug

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...

August 6, 2018
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06Aug

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...

August 6, 2018
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03Aug

US. Would Universal Savings Accounts cannibalize retirement plan contributions?

In the coming days, Rep. Kevin Brady, R-TX, chair of the House Ways and Means Committee, is expected to circulate a discussion draft of a Tax Reform 2.0 bill with an eye to advancing a floor vote in the House this September. The bill is expected to include a provision creating Universal Savings Accounts, which would allow any American age 18 or older to invest after-tax dollars that could grow tax-free and be withdrawn for any purpose, at any time,...

August 3, 2018
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03Aug

US. Public Pensions Are a Disaster. Here’s a Fair Solution

Connecticut is at the cutting edge of a crisis unfolding across the U.S.: States and municipalities have promised their employees some $4 trillion in pension benefits that they can’t afford to pay. Now the state needs to help lead the way out, by setting aside partisan politics and moving to a better system. Thanks to decades of mismanagement by politicians from both parties, Connecticut has one of the largest pension funding deficits in the country, amounting to one fifth of...

August 3, 2018
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02Aug

MetLife Profit Beats Estimates, Aided by U.S. Tax-Law Revamp

MetLife Inc. has tax-code changes and a deal with FedEx Corp. to thank for second-quarter profit that beat analysts’ expectations. Earnings at the U.S. business surged 36 percent from a year earlier, fueled by a reduced corporate-tax rate and a pension-risk transfer contract won from FedEx, the New York-based life insurer said Wednesday in a statement. Adjusted earnings per share came in at $1.30, beating the $1.17 estimate from 17 analysts surveyed by Bloomberg. Chief Executive Officer Steven Kandarian has been...

August 2, 2018
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