Improving the Performance of Retirement Plans

//Improving the Performance of Retirement Plans

Improving the Performance of Retirement Plans

For Mark Roberts’ Use: In recent years, many Americans have expressed concerns over their eventual retirements. They worry that they started saving too late, that their retirement accounts aren’t performing as hoped, or that the rising cost of living will prevent them from retiring at all. These are valid concerns, but luckily we are seeing some evidence that offers a bit more optimism.

According to data from Employee Benefit News*, average retirement account balances are indeed growing! Marked change has been recorded since 2012, reflecting perhaps a combination of factors that will aid Baby Boomers hoping to retire in the near future. First, let’s take a look at the data.

Average retirement account balances were tracked in 2012, then again in 2016 and 2017. For 401k plans, average balances were recorded as following:

  • In 2012, the average 401k balance was $73,300
  • In 2016, the average 401k balance was $89,100
  • In 2017, the average 401k balance was $97,700

IRA balances showed a similar trend:

  • In 2012, the average IRA balance was $73,100
  • In 2016, the average IRA balance was $89,600
  • In 2017, the average IRA balance was $100,200

Why the growth in retirement funds? It’s likely that more than one factor is contributing to this upward trend. First, we’ve noticed improved stock market performance in recent years, which would obviously contribute to growth depending upon how each individual manages their fund.

However, the study’s analysts also discovered that workers increased their savings rate during this time, and that employer contributions grew as well. Each individual’s situation is different, of course, but these figures underline the significant difference one can make to their own retirement savings, by following a few key steps. Increase your savings a bit each year, particularly if you receive a raise or bonus, and endeavor to reach your employer’s matching contribution amount.

So, how does your own situation compare? Are you feeling more confident about retirement? For more information on planning for your own future, give us a call. We can discuss you individual needs and help you adjust your savings strategy, if needed.

*Employee Benefit News, August 3, 2017

By |2018-11-12T09:57:15+00:00November 12th, 2018|Retirement|0 Comments

About the Author:

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.