Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
December 20th, 2017
Benefits & Administration
Loans, Suspended Deferrals Can Reduce Nest Eggs by as Much as 20%
Loans, hardship withdrawals and suspended deferrals reduce American’s 401(k) savings by an average of 14%, according to research by MassMutual. The impact is greater for younger workers, as their time horizon for saving is longer than older people. For example, a 29-year-old employee who is on target to retire at age 65 but who takes out a hardship withdrawal reduces their retirement readiness by 20%. Read more >
TDFs Evolve Alongside Participant Preferences
The 2017 Participant Survey from Northern Trust Asset Management shows evidence of an ongoing reevaluation of target-date funds (TDFs) “Target-date products are no longer the modular asset-allocation set-it-and-forget-it type options that asset managers first launched many years ago,” the analysis states. “They continue to evolve as greater focus is applied to understanding investors and their actual retirement needs.” The survey also shows today’s workers are looking more at outcomes to measure retirement savings and investing success. Read more >
Lack of Financial Literacy Remains Historic American Challenge
A new analysis from Questis takes a striking look back at the recent and not-so-recent development of workplace financial education in the United States; quotes from figures throughout history show how the problem of poor financial literacy has been around since the beginning of the American Republic. Read more >
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Missing Inaction
Economic Events

Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,297,000, the Bureau of Labor Statistics reports. This is 3.3% above the revised October estimate of 1,256,000 and is 12.9% above the November 2016 rate of 1,149,000. Single-family housing starts in November were at a rate of 930,000; this is 5.3% above the revised October figure of 883,000. The November rate for units in buildings with five units or more was 359,000.

Market Mirror

Tuesday, the Dow closed 37.45 points (0.15%) lower at 24,754.75, the NASDAQ dropped 30.91 points (0.44%) to finish at 6,963.85, and the S&P 500 decreased 8.69 points (0.32%) to 2,681.47. The Russell 2000 fell 12.17 points (0.79%) to 1,536.75, and the Wilshire 5000 was down 49.87 points (0.18%) at 27,821.94.

 

The price of the 10-year Treasury note decreased 18/32, bringing its yield up to 2.456%. The price of the 30-year Treasury bond fell 1 13/32, increasing its yield to 2.810%.

Sponsored message from Natixis
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Ask the Experts
Worried About Tax Reform
“I have received so many emails etc. on tax reform, including articles that conflict with each other, that I am on information overload! Should I be worried?” Read more >
Investing
Multi-Asset Fund Research Recommends More Focused Benchmarks
Respondents to a recent survey broadly use multiple benchmarks and measures to assess multi-asset fund performance, with around three selected on average. This runs the risk of investors losing sight of the primary goal, potentially leading to disappointment, Insight Investment says. Read more >
Small Talk
LendEDU polled 1,000 adult Americans that are making a financial resolution in 2018 and found more than half (52.2%) said their most important financial resolution for the new year is to save more money. This was followed by paying off debt (37.50%) and spending less money. More than one-quarter (28.6%) of adults surveyed indicated they set a financial resolution for 2017, and of those, 44.76% said they met or exceeded their goal. Read more >

ON THIS DATE: In 1606, the “Susan Constant,” “Godspeed” and “Discovery” set sail from London. Their landing at Jamestown, Virginia, was the start of the first permanent English settlement in America. In 1803, the United States Senate ratified a treaty that included the Louisiana Territories from France for $15 million. The transfer was completed with formal ceremonies in New Orleans. In 1820, the state of Missouri enacted legislation to tax bachelors between the ages of 21 and 50 for being unmarried. The tax was $1 a year. In 1860, South Carolina became the first state to secede from the American Union. In 1864, Confederate forces evacuated Savannah, Georgia, as Union Gen. William T. Sherman continued his “March to the Sea.” In 1879, Thomas A. Edison privately demonstrated his incandescent light at Menlo Park, New Jersey. In 1946, the Frank Capra film “It’s A Wonderful Life” had a preview showing for charity at New York City’s Globe Theatre, a day before its “official” world premiere. In 1968, author John Steinbeck died at the age of 66. In 1989, General Noriega, Panama’s former dictator, was overthrown by a United States invasion force invited by the new civilian government. In 1990, the world’s first website and server went live at CERN. The first website was http://info.cern.ch/hypertext/WWW/TheProject.html. In 1998, in Houston, a 27-year-old woman gave birth to the only known living set of octuplets. In 2001, the U.S. Congress passed a $20 billion package to finance the war against terrorism taking place in Afghanistan.

 

 

WEDNESDAY WISDOM: “A sad soul can kill quicker than a germ.”—John Steinbeck

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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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