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You May Need To Revise Your Retirement Plan: Financial Advisors' Daily Digest

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By SA Gil Weinreich :

Great news! The odds are increasing that you will have more years to live than you might have anticipated based on the life expectancies you were aware of growing up. That is one implication of newly updated mortality tables produced by the Society of Actuaries which are expected to be adopted by the IRS.

I like to accentuate the positive - and what could be more positive than the gift of life - but I candidly admit that the tenor of this article found in Pensions & Investments tends toward the negative, as it is focused on retirement plans' ensuing increased liabilities and diminished funded status. You can read the above-linked article for the dreary details, but I'd like to just spell out its implications in layman's terms:

If you participate in a pension plan and are on the cusp of retirement, your company will have a powerful incentive to make an attractive-seeming lump sum offer. The reason is that adoption of the new tables will increase the amount the company owes you, so plan participants might want to delay acceptance of benefits.

If you're a corporate treasurer, IRS adoption of the tables means you will need to kick in higher contributions to the retirement plan or see your funded status decline.

If you are a living, breathing human being - that is, you needn't fall into one of the above categories - your odds of enjoying a longer life mean that you need to plan on some combination of saving more, investing more, spending less, and working longer. With proper planning, the trade-off of extra sacrifices should be more than compensated for with added time to enjoy a rich life.

Please share your thoughts in the comments section. Meanwhile, here are today's advisor-related links:

  • Harlan Levy interviews Australian financial planner Stephen Cole on America's fuzzy math .
  • John Lohr pronounces the fiduciary rule effectively dead and laments its demise.
  • Jeremy Grantham: The mean reversion in corporate profitability will not be pleasing to value managers like him.
  • Charlie Bilello: Don't assume today's low volatility means stocks are less risky.
  • Rob Marstrand discusses how to choose the best ETF for the job.
  • James Picerno: Strong U.S. equity returns means it's time to rebalance .

For more content geared to FAs, visit the Financial Advisor Center , sponsored by Franklin LibertyShares ETFs.

See also I Make A Big Purchase In My IRA on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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