In his article, Steven Rattner comments on the failing method that Americans have been relying on for retirement planning. Experts have urged the aging population to allocate their assets, evaluate mutual funds and even place their savings in individual stock investments; however, this is not working. Rattner suggests,
Until we fix the broader mess, individuals should follow a few simple rules:
• Try to save as much as possible of your income, ideally 10 percent to 15 percent.
• Never, ever pick a stock or an actively managed mutual fund. Use only low-cost index funds.
• Emphasize equities when you are young; fixed income as you get older. Better yet, consider target-date funds, which do this rebalancing for you.
• If you have a good 401(k) plan and you change jobs, either leave it where it is or move it to your new employer; I.R.A.s should be your last choice. They often come with higher fees and at least until the new rule takes effect, bad advice.
• Don’t cash out early.
As a nation, we indisputably face a retirement crisis. The one advantage of our current system is that we each have the ability not to make it worse.
Find the entire story here: Pension Holders Need a New Retirement Plan, Not Stock Tips
Posted by Allison Trupp, Associate Editor, Wealth Strategies Journal