401(k)

Rescuing Retirement with Teresa Ghilarducci and Tony James

At a time when Congress can’t seem to agree on much, lawmakers are acknowledging that the main retirement savings vehicle, the 401(k), needs some fixing. Before you get too excited, the changes being considered are more like touch ups, rather than a complete renovation.

Early conversations include: requiring plan sponsors to let participants know how much their total savings would translate into monthly income; a repeal of the age limit on IRA contributions; a more liberal approach to pooled 401(k) plans, which would help more small businesses offer retirement benefits to their employees; and the option to use a portion of a tax refund to fund retirement.

While none of these ideas represents a game-changer for retirement savers, it would be the first major enhancement since 2006. But if lawmakers wanted to seek a more radical approach, they would consult with Teresa Ghilarducci and Tony James, co-authors of Rescuing Retirement: A Plan to Guarantee Retirement Security for All Americans, who claim that "The U.S. experiment with 401(k)s and IRAs, launched in the early 1980s, has failed miserably to deliver on its promises."

Ghilarducci, a labor economist and leading expert in retirement security, and James, Executive Vice Chairman of the investment firm Blackstone Group, have a detailed, well-researched and more extreme recommendation for rescuing the U.S. retirement system. It starts with a concept called a “Guaranteed Retirement Account” (“GRA”), which would be offered to every worker, "from Uber drivers to CEOs."

The GRA would be portable, whether you work for a number of different companies or for yourself – and each individual would control his or her account. It would be funded by a minimum 3 percent of salary, half contributed by the worker and half by the employer.

Perhaps the most interesting part of the GRA is that it fixes some of the big problems that are prevalent in current plans, the biggest of which is that right now, saving for retirement is voluntary. The GRA would mandate retirement savings for everyone, including those who work part-time or are self-employed.

If it all sounds too good to be true, I encourage you to check out the book. I was a cynic, but after reading it and interviewing Ghilarducci and James, I’m a convert.

“Better Off” is sponsored by Betterment.

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Can Congress Fix the 401(k)?

Can Congress Fix the 401(k)?

At a time when Congress can’t seem to agree on much, lawmakers are acknowledging that the main retirement savings vehicle, the 401(k), needs some fixing. Before you get too excited, the changes being considered are more like touch ups, rather than a complete renovation.

Expensive Retirement Plans + Father/Daughter CFPs

A "father of the year" candidate starts us off this week as we chat with Richard from Connecticut who is trying to help his daughter navigate her workplace retirement plan options. The problem he's having is that it's a plan containing a bunch of awfully darn expensive investment options. Is there a workaround? 

We finished up the hour answering some questions from the endless email pile.

Hour two this week was an interesting chat with a couple CFPs who also just happen to be related..as in father and daughter! 

Walter Wisniewski and Allison Vanaski, owners of Arcadia Wealth Management, recently teamed up to write The Millionaire Within, a book intended to show how people tend to succeed or fail with their finances based on their perceptions, behaviors and biases about money, not because they are experts at timing the market.

This may be an investment book, but it is not about the mechanics of investing. It's more about enriching your future by embracing your capacity to change your perspectives about money. Intelligent financial decision-making is not about money. It's about emotions and behavior and unleashing the power that lies within you.

Have a money question? Email me here or call 855-411-JILL.

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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

Retirement Plan Options + A Large Inheritance

Happy Fourth of July weekend! Or was it last weekend? Or is it this weekend? Whatever the case, the show goes on.

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This weekend we kick things off with young Nicole from Seattle who just started a job at a local university and has a decision to make when it comes to her retirement plan. A traditional 401(k) or a defined benefit pension plan which only kicks in after she's been there for ten years? It's a tough call to make. 

Next up was Sharon from Michigan. She and her husband just inherited $400,000. What should they do with it? Pay off some debt? Invest it? 

Hour two this week features an interview with my pal and retirement guru, Mark Miller. No stranger to writing books, Mark was on to chat about his latest project, Jolt: Stories of Trauma and Transformation

Having interviewed dozens of people over the years who are hell-bent on changing their lives and careers to focus on work with more purpose and meaning, Mark began to notice a pattern: many leap-of-faith transformations begin with unforeseen traumatic life events.

Mark decided to think of these high-voltage bolts out of the blue as jolts — painful events that stop people in their tracks and then thrust them toward positive change.

The death of a child. Life-threatening illness. Plane crashes. Terror attacks. Natural disasters. Some of us never fully recover from unimaginable traumas like these, but some not only survive—they bounce back to thrive and grow.

Jolt tells the stories of people transformed by trauma, and the new paths that they pursue.

Have a money question? Email me here or call 855-411-JILL.

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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.