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ARCHIVE
Grow Your Money Skills…It’s Financial Literacy Month!
By Miriam Bridges
April 1, 2021
April showers bring…Financial Literacy Month!
Financial literacy will equip you with money skills. Good money habits and skills will lead you to greater financial well-being—and help you achieve things such as education, home ownership, and a comfortable retirement. And those will last a lot longer than May flowers.
The ICI Education Foundation (ICIEF) works to promote investment education, so we’re going to share a few resources you can use to build your investment and savings skills this month.
- If you’re a parent looking to help your children learn about investing and reaching long-term financial goals, ICIEF has two digital resources available to help you help them. (And you may learn a few things yourself!) Explore essential investing basics such as diversification, compound interest, and risk while you travel through the Investing Road Trip. Then, put those investing basics into action by Playing the Long Game. Invest $1,000 in the S&P 500, follow the market, and see what works best—staying invested or trying to time the market.
- If you’re new to investing, it’s important to understand key concepts. ICIEF offers a helpful series examining different investing basics that are essential to successful investing. Learn about risk, diversification, the benefits of mutual funds, the cost of investing, and more.
- If you’re in college, see if SFEPD is offering financial literacy workshops and seminars on your campus.
- If you’re in the workforce, the Alliance for Investor Education offers a wide range of information to help you make wise investment decisions.
- If you’re committed to financial smarts for young people, take a look at the Jump$tart Clearinghouse—a comprehensive online library of financial education resources—by the Jump$tart Coalition for Personal Financial Literacy. This website offers resources from dozens of national organizations that share a commitment to advancing youth financial literacy.
- If you’re an educator, the Maryland Council on Economic Education offers a wide variety of lessons and educational tools to support teachers.
- Looking for more? The American Savings Education Council offers resources by goal, age, and circumstance.
- Stay tuned for an upcoming program sponsored by an ICIEF grant—the University of the District of Columbia’s Financial Literacy Initiative Program (FLIP)!
Last, follow @ICIEF on Twitter to find other investment education materials we’ll promote…and maybe a quiz or two to test your money IQ! (You can also find ICIEF on Facebook and LinkedIn.) And use #FLM21 to learn more from other organizations committed to money skills.
Miriam Bridges is vice president of the ICI Education Foundation.
Permalink: https://www.ici.org/viewpoints/21_view_finlitmonth
TOPICS: 401(k)Equity InvestingIRAInvestment EducationInvestor ResearchMutual FundRetirement PolicySavingsShareholder
To Do: Check Your Savings Goals This Week!
By Miriam Bridges
February 22, 2021
This week, the Investment Company Institute (ICI) and the ICI Education Foundation (ICIEF) are joining thousands of corporations, nonprofits, government agencies, and individuals to celebrate America Saves Week. This annual campaign encourages Americans to assess their financial situations, set savings goals, and implement plans to achieve them.
TOPICS: 401(k)Equity InvestingIRAInvestment EducationInvestor ResearchMutual FundRetirement PolicySavingsShareholder
Survey Confirms: Despite COVID-19, Retirement Savers Protect Their Accounts
By Sarah Holden and Daniel Schrass
February 2, 2021
A new national survey by ICI addresses how Americans responded to the financial pressure since the onset of the COVID-19 pandemic, with special emphasis on whether they’ve tapped their retirement accounts. The results show that a strong majority (65 percent) of US individuals did not take financial actions as a result of COVID-19.
TOPICS: 401(k)COVID-19Financial StabilityIRARetirement Research
Investing Basics: Saving for Retirement with a 401(k) Plan
By Christina Kilroy
September 9, 2020
The ICI Education Foundation’s Investing Road Trip ends at retirement, depicted with idyllic images of a park bench and a golf cart. But what if, in real life, your path doesn’t quite follow this tidy path? Even for workers who get a late start, hit some bumps, and take a few detours, saving for retirement is still possible. Here are guideposts for 401(k) saving as you journey to retirement.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Investing Basics: Saving for Retirement on Your Own
By Christina Kilroy
August 31, 2020
A majority of workers aged 26 to 64 were active participants in a workplace retirement plan in 2017, according to ICI’s most recent tabulation of tax data. But what if you don’t have access to a workplace retirement plan? You still have great options to save for retirement with similar advantages to the 401(k). Learn more in the latest installment of ICI Education Foundation’s investing basics series.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Congress Should Give Americans Flexibility to Keep Retirement Savings on Track
By Paul Schott Stevens
July 31, 2020
As policymakers take further steps to assist families and businesses weathering the storm, Congress can help American families get their retirement savings goals back on track by including the “Temporary Coronavirus-Related Catch-Up Contribution” proposal in the next COVID-19 relief package.
TOPICS: 401(k)Government AffairsIRAMutual FundRetirement PolicyShareholder
Investing Basics: Understanding Fees and Expenses
By Christina Kilroy
July 30, 2020
In the ICI Education Foundation’s Investing Road Trip exhibit, a toll booth illustrates the fees and expenses that are part of investing. Every vehicle on a toll road pays and some of that money helps to maintain the road, which ultimately makes for a smoother and safer trip for everybody. Likewise, every investor pays a cost to invest but receives professional management and services in return.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
IRA Investors Are Concentrated in Lower-Cost Mutual Funds
By James Duvall
July 30, 2020
Individual retirement accounts (IRAs) represent the largest share of assets in the US retirement market, with assets totaling $11.0 trillion at year-end 2019. As part of an ongoing effort to shed light on important insights into IRA investing, ICI is updating its analysis of expense ratios that investors pay on mutual funds in their IRAs.
TOPICS: 401(k)Bond FundEquity InvestingIRAMutual FundRetirement ResearchShareholder
Investing Basics: Compound Returns and the Power of Reinvestment
By Christina Kilroy
June 29, 2020
Start saving early. You’ve heard it once, you’ve heard it a million times. There are a few reasons why that’s a good idea—to get in the habit, to manage risks to your investments and income, and to allow more time to contribute to your savings and let them grow. But the strongest case for starting early boils down to one phrase: compound returns.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
The US Retirement System Is Stronger Than Critics Portray
By Paul Schott Stevens
May 18, 2020
A recent Washington Post opinion piece paints an inaccurate and misleading picture of the US retirement system by misusing data and making false assumptions. The retirement system is far stronger than portrayed.
TOPICS: 401(k)IRARetirement Research
Investing Basics: 529 Savings Plans
By Christina Kilroy
May 7, 2020
One thing you can expect when you’re expecting a baby is to pay a lot for diapers—you might pay about $600 by your child’s first birthday. But the cost of diapers is child’s play compared to the costs that could come later when paying for college.
To encourage people to save for these education costs, nearly every state and the District of Columbia offer 529 plans, and most offer special tax treatment for savers participating in those plans.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Investing Basics: Tax Benefits to Encourage Saving
By Christina Kilroy
April 14, 2020
To encourage people to save, federal and state governments offer special tax treatment for savings plans for specific goals, such as retirement and education. By increasing the benefit that savers receive in the short term, the government nudges savers to take a positive action that will provide a benefit in the long term.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Investing Basics: The Benefits of Mutual Funds
By Christina Kilroy
March 31, 2020
We’ve reached the halfway point in this series, and we’ve covered a lot of ground: the benefits of investing, how to think about risk, different types of investments, why diversification is important, and dollar-cost averaging. This month’s installment brings all these topics together and examines seven features of mutual funds that make them an enduringly popular investment choice.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Investing Basics: Dollar-Cost Averaging
By Christina Kilroy
February 27, 2020
Emotions are the enemy of successful investing. For long-term investors, dollar-cost averaging is a smart way to take the emotion out of investing and to eliminate the difficulty and uncertainty of trying to time the market.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Investing Basics: Diversification
By Christina Kilroy
January 30, 2020
Eggs play a starring role in diversification’s ubiquitous analogy—one we used in the Investing Road Trip©—and for good reason. If you drop a basket holding all your eggs, you’ll be out a lot of eggs. Spreading your eggs across several baskets is a good defense against the risks of exposing all your assets to the same risk.
But perhaps we should also make the point that eggs shouldn’t be the only food in your basket. They may be high in protein, but your body needs a mix of nutrients for good health. Similarly, with investing, a better goal is to build a balanced “diet” of asset classes across industries, geographic areas, and types of securities....
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Investing Basics: Types of Investments
By Christina Kilroy
December 23, 2019
Two of the most common investments are stocks and bonds. Chances are if you own a portfolio of investments, those two types of assets make up a significant part—or perhaps all—of it. For those who want to start investing, it’s essential to understand these common portfolio building blocks...
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Talkin’ ’Bout the Generations: ICI Research on Mutual Fund Ownership by Generation
By Michael Bogdan and Candice Gullett
December 11, 2019
Talk about the differences between generations is a hot topic in today’s cultural conversation. And the Millennial and Baby Boomer generations are in the middle of a little generational warfare. But when it comes to owning mutual funds, are there really that many differences?
TOPICS: 401(k)Equity FundEquity InvestingIRAInvestor ResearchMoney Market FundsRetirement ResearchSavings
Investing Basics: What Is Risk?
By Christina Kilroy
November 26, 2019
You invest with the hope of earning a return on your investment. That opportunity invariably involves risk, including the possibility of losing some or all of the money you invested. Understanding these risks is an essential step toward successful investing.
The second installment of the ICI Education Foundation's blog series celebrating its 30th anniversary explores different types of investing risks.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
ICYMI: A Q&A with Members of ICI's Retirement Team
November 19, 2019
For this year's 2019 Annual Report to Members, four members of ICI's retirement team sat down to discuss ICI's legislative, regulatory, research, and communications activities to advocate for well-informed public policies that help Americans prepare for retirement....
TOPICS: 401(k)Fund RegulationGovernment AffairsMutual FundRetirement PolicyRetirement ResearchShareholder
Investing Basics: What Is Investing?
By Christina Kilroy
October 31, 2019
This month, the ICI Education Foundation celebrates 30 years of developing, delivering, and promoting investor education. As part of our yearlong celebration, we will be sharing an ICI Viewpoints post each month that explains a basic concept of investing, drawn from the ICI Education Foundation’s Investing Road Trip.
TOPICS: 401(k)Exchange-Traded FundsIRAInvestment EducationMutual FundSavingsShareholder
Five Key Points on 401(k) Plan Fees from ICI Research
By James Duvall and Steven Bass
October 23, 2019
Thanks to innovation and a competitive market, 401(k) mutual fund fees keep falling. ICI has a window into this information through our study of the cost of providing 401(k)s, in which we take a close look at the expenses and fees of mutual funds incurred by 401(k) plan investors, and in related research on fund fees through a collaborative research effort between ICI and BrightScope.
TOPICS: 401(k)Equity InvestingMutual FundRetirement ResearchShareholder
30 Tips to Celebrate 30 Years of Investor Education
By Christina Kilroy
September 3, 2019
For 30 years, the ICI Education Foundation has pursued its mission to advance investor education by developing, delivering, and promoting investor education to diverse audiences across a range of ages and life stages. As we kick off our celebration of the foundation’s 30th anniversary in October, we will be sharing tips for successful investing on our social media accounts over the coming weeks....
TOPICS: 401(k)IRAInvestment EducationMutual FundSavingsTaxes
Critics Claim Retirement Savers Aren’t Behaving Rationally. The Data Say They Are.
By Peter Brady
August 22, 2019
In a letter to MarketWatch responding to “Opinion: This Recent Report Suggests Steady Saving for Retirement Is Not Important,” published August 14, ICI Senior Economic Adviser Peter Brady refutes claims that criticize ICI’s recent retirement research, noting that more people benefit from employer plans than is commonly understood….
TOPICS: 401(k)IRARetirement PolicyRetirement Research
IRA Investors Are Concentrated in Lower-Cost Mutual Funds
By James Duvall
August 20, 2019
Individual retirement accounts (IRAs) represent the largest share of assets in the US retirement market, with assets totaling $8.7 trillion at year-end 2018. Forty-six percent of this total is held in mutual funds, with IRA mutual fund investors primarily invested in equity funds. As part of ICI’s ongoing efforts to shed light on important insights into IRA investing, ICI is updating its analysis of expense ratios that investors pay on mutual funds in their IRAs....
TOPICS: 401(k)Bond FundEquity InvestingIRAMutual FundRetirement ResearchShareholder
Mind the Gap
By Sarah Holden and Christina Kilroy
July 22, 2019
It’s a good idea to “mind the gap” if you’re traveling on the Tube in London, taking Amtrak in the United States, or riding Metro in Paris or Washington, DC. Being mindful of the space between where you are and where you’re going is important—not only when navigating public transit, but also when saving for retirement. Saving for retirement is a career-long process, with many decisions along the way....
TOPICS: 401(k)IRAInvestment EducationMutual FundRetirement ResearchSavingsShareholderTaxes
ICI’s Quarterly Retirement Market Resource
By Miriam Bridges
April 23, 2019
ICI publishes statistics on the US retirement market every quarter as an information resource for mutual funds, individual investors, the media, policymakers, and researchers. This report includes individual retirement account (IRA) and defined contribution (DC) plan assets, including 401(k) plans, and mutual fund assets held in retirement accounts....
TOPICS: 401(k)IRAMutual FundRetirement ResearchSavings
Don’t Forget the 401(k): America’s Retirement System Helps Workers Save and Preserve Assets
By Paul Schott Stevens
February 26, 2019
In a letter to the Wall Street Journal responding to “Forget the 401(k),” published February 11, ICI President and CEO Paul Schott Stevens shows how the US retirement system actively engages employers to promote workers' retirement saving, noting that the current system also preserves choice and control of investments....
Growing Better with Age: The 401(k) Turns Forty
By Miriam Bridges and Christina Kilroy
November 30, 2018
This month marks the fortieth birthday of the most prevalent retirement plan available to workers today: the 401(k). It’s a milestone, to be sure, but there are no mid-life doldrums here—401(k) plans continue to grow, and currently hold $5.3 trillion in assets on behalf of more than 55 million active participants and millions of former employees and retirees.
TOPICS: 401(k)Investor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholderTarget Date Funds
IRA Investors Are Concentrated in Lower-Cost Mutual Funds
By James Duvall
August 8, 2018
Individual retirement accounts (IRAs) represent the largest share of assets in the US retirement market, with assets totaling $9.2 trillion at year-end 2017. Forty-seven percent of this total is held in mutual funds, with IRA mutual fund investors primarily invested in equity funds. As part of ICI’s ongoing efforts to shed light on important insights into IRA investing, ICI is offering an updated analysis of expense ratios that investors pay on mutual funds in their IRAs....
TOPICS: 401(k)Bond FundEquity InvestingIRAMutual FundRetirement ResearchShareholder
Americans: In Defined Contribution We Trust
By Sarah Holden
March 8, 2018
Millions of Americans personally direct their retirement investments in defined contribution (DC) plans, which account for nearly $8 trillion in savings. Because it is vitally important that regulators, policymakers, and employers understand the beliefs and behaviors of these investors, ICI asked Americans what they thought of DC retirement plan accounts, which include 401(k) and 403(b) accounts.
The results, which we summarized in “American Views on Defined Contribution Plan Saving, 2017,” were clear: whether they had DC accounts or not, Americans appreciate DC plan accounts and are confident that these plans can help people meet their retirement goals...
TOPICS: 401(k)Investor ResearchRetirement PolicyRetirement Research
Fund Investors Will “Run”? Sorry, Charlie Brown
By Sean Collins and Sarah Holden
March 7, 2018
For decades, Charles Schulz kept us in suspense: surely this time, Lucy would let Charlie Brown kick the football. Nope. Every time, at the last second, she pulled the ball away—and Charlie Brown fell flat on his back.
We’ve seen the same gap between wish and fulfillment around market turmoil and mutual funds. For decades, commentators have predicted that investors in stock and bond funds, faced with market turmoil, would redeem en masse, perhaps adding to the market turmoil. Despite plenty of opportunities, that just hasn’t happened.
Stock market turmoil in February provides yet another example of this...
TOPICS: 401(k)Bond FundEquity InvestingFinancial MarketsFinancial StabilityInterest RateInvestor ResearchMutual FundRetirement ResearchTrading
Let’s Give the US Retirement System the Credit It Deserves
By Sarah Holden
December 27, 2017
The Washington Post’s latest article on the future of retirement security (“‘I Hope I Can Quit Working in a Few Years’: A Preview of the US Without Pensions,” December 23) is not a preview but a retrospective look at some of the challenges that workers face in defined benefit (DB) pension plans even at “blue-chip” firms. As documented in the article, with traditional DB plans, workers often failed to get their full promised benefits, thanks to vesting rules, back-loaded benefit accrual, business failure, and labor mobility.
TOPICS: 401(k)Financial StabilityRetirement PolicyRetirement Research
More People Are Building Nest Eggs with Their IRAs
By Sarah Holden
December 20, 2017
Individual retirement account (IRA) owners are good stewards of their money. They take a thoughtful approach to preparing for retirement by taking advantage of the dual role of IRAs and by researching important investment decisions, according to recent research from ICI. These are among the findings from “The Role of IRAs in US Households’ Saving for Retirement, 2017,” which details ICI’s research on IRA-owning households.
TOPICS: 401(k)Fund RegulationInvestor ResearchMutual FundRetirement Research
Autumn Air, Playoff Baseball, and…National Retirement Security Week
By Christina Kilroy
October 17, 2017
The baseball postseason is well underway and the air has finally turned crisp. Perhaps that’s why—as we’re marking National Retirement Security Week—our thoughts have turned to the words of Yogi Berra, the great New York Yankees catcher. He was credited with so many pithy, wise, and witty sayings that, in classic Berra style, he remarked, “I really didn't say everything I said.”
TOPICS: 401(k)Investment EducationMutual FundSavingsShareholderTaxes
In Reality, Data Tell a Different Story of Old Age in America
By Sarah Holden
October 10, 2017
“The New Reality of Old Age in America” (September 30) portrays economic security in retirement by pairing anecdotes about workers who have fared poorly with selected statistics. Comprehensive data on how our system is working overall tell a far different story: America’s retirement system enables most of today’s retirees to maintain their standards of living.
TOPICS: 401(k)Investor ResearchMutual FundPolicy ResearchRetirement PolicyRetirement ResearchSavingsShareholder
It’s National 401(k) Day!
By Sarah Holden
September 8, 2017
ICI is marking National 401(k) Day by spotlighting the strengths of 401(k) plans and their role in the American retirement system, and by reminding workers to get the most of their own 401(k) plans.
Americans Trust in Their 401(k) Plans
By Sarah Holden
July 7, 2017
Defined contribution (DC) plans have long been a key component of Americans’ retirement savings. And with more than $5 trillion in assets and about 54 million active participants, 401(k) plans are the most common type.
TOPICS: 401(k)Fund RegulationInvestor ResearchMutual FundRetirement Research
Scratch That: Why Arguments of a Broken Retirement System Are Misguided
By Peter J. Brady
April 6, 2017
What if you were given the task of designing a retirement system from scratch? In a recent paper, New York University law professor David Kamin proposes a retirement system that combines a mandatory savings floor with tax incentives to encourage savings above the mandated minimum. He is not the first to propose a new mandatory retirement plan, with others proposing that either employers be required to offer a plan or workers be required to contribute to a plan.
TOPICS: 401(k)Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavings
ICI Staff Take Local Students on an “Investing Road Trip”
By Christina Kilroy
March 31, 2017
Among the eighth graders who walked into Junior Achievement’s Finance Park were an aspiring filmmaker, a model, and a sports agent. But for their daylong budgeting simulation—where each student is assigned an age, family, debt, credit score, job, and salary—they would transform into an auto mechanic, an insurance agent, and a bus driver.
Exemptions from Investor Protections Put California Savers at Risk
By Paul Schott Stevens
March 22, 2017
The following ICI Viewpoints is a letter to the editor by Paul Schott Stevens, president and CEO of the Investment Company Institute, in response to an editorial published on March 8, 2017, in the Los Angeles Times.
TOPICS: 401(k)Investor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsShareholder
ICI Study: 55 Million US Households Own Mutual Funds
By Sarah Holden
February 24, 2017
Gathering and analyzing data about how shareholders purchase and use mutual funds are critical to ICI’s work to facilitate sound, well-informed public policies affecting funds, their investors, and the retirement markets.
TOPICS: 401(k)Investor ResearchMutual FundRetirement ResearchSavings
Ten Years After the PPA, the Path to Retirement Saving Is Easier
By Sarah Holden and Elena Barone Chism
August 22, 2016
Ten years ago, on August 17, 2006, President George W. Bush signed the Pension Protection Act (PPA) into law, with the goal of ensuring greater retirement security for American workers. With regard to defined contribution (DC) plans, such as 401(k) plans, PPA further encouraged automatic enrollment while paving the way for diversified default investments and the creation of Roth accounts inside DC plans. PPA also made permanent previously legislated contribution-limit increases and the saver’s credit.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
Building on the Success of the Private-Sector Retirement System Is the Real “Secure Choice”
By David Blass
July 8, 2016
Retirement assets in the United States totaled $24 trillion at the end of 2015, bolstered by investments through employer-sponsored plans and individual retirement accounts (IRAs).
TOPICS: 401(k)Fund RegulationGovernment AffairsMutual FundRetirement Policy
Getting Started in a 401(k) Plan—and Getting the Most Out of It
By Christina Kilroy
February 26, 2016
This week, ICI and the Investment Company Institute Education Foundation (ICIEF) joined thousands of corporations, nonprofits, and government agencies to celebrate America Saves Week.
TOPICS: 401(k)Investment EducationInvestor ResearchRetirement ResearchSavings
How America Supports Retirement: The Incentive to Save Is Not Upside Down
By Peter J. Brady
February 25, 2016
In my new book, How America Supports Retirement: Challenging the Conventional Wisdom on Who Benefits, and the first three ICI Viewpoints in this series, I’ve demonstrated that Social Security’s benefit formula drives participation in tax-deferred employer-sponsored retirement plans ; that the full system of government support for retirement is progressive; and that those in higher tax brackets don’t enjoy greater “bang for their buck” from tax deferral.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
How America Supports Retirement: What Do Tax Rates Have to Do with the Benefits of Tax Deferral? Less Than You Think
By Peter J. Brady
February 24, 2016
In my new book, How America Supports Retirement: Challenging the Conventional Wisdom on Who Benefits, I set out to gain a comprehensive view of how government policy supports American workers as they gather resources for retirement.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
How America Supports Retirement: No, Benefits Are Not “Tilted” to the Higher Earners
By Peter J. Brady
February 23, 2016
Second in a series of ICI Viewpoints.
In my new book, How America Supports Retirement: Challenging the Conventional Wisdom on Who Benefits, I analyze the benefits individuals receive from the major government policies that help American workers accumulate resources for retirement: Social Security and tax deferral on compensation set aside for retirement in employer-based plans (both traditional pensions and defined contribution plans, such as 401(k) plans).
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
How America Supports Retirement: Tackling the Myths That Surround Us
By Peter J. Brady
February 22, 2016
America’s retirement system isn’t perfect but it’s a lot stronger than many people think. Whether by accident or design, the U.S. retirement system provides benefits to workers across the earnings distribution and has helped millions of retirees maintain their standard of living in retirement.
TOPICS: 401(k)Government AffairsInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchTaxes
Retirement Planning: No Place for Fairy Tales
By Paul Schott Stevens
November 17, 2015
It is sadly appropriate that Labor Secretary Thomas Perez invokes fairy tales in his Nov. 16 commentary, “A path forward for state retirement plans.” Neither his version of the past nor his program for the future accord with reality.
TOPICS: 401(k)Fund RegulationGovernment AffairsMutual FundRetirement Policy
Opinion: The Tax Threat to Your Mutual Fund
By Mike McNamee
May 7, 2015
Vanguard Chairman and CEO Bill McNabb sent “an open letter to all mutual fund investors” in the opinion pages of Thursday’s Wall Street Journal. His message: fund investors face a clear threat of higher costs, weaker returns, and a bailout tax to salvage other failing financial institutions—all if regulators get their way in imposing new rules on funds or their managers.
TOPICS: 401(k)Federal ReserveFinancial MarketsFinancial StabilityFund RegulationMutual FundRetirement PolicySavingsShareholderTradingTreasury
GMM Policy Forum: “It Always Comes Down to Trust”
By Todd Bernhardt
May 6, 2015
Over the 75-year history of the modern mutual fund industry, funds have helped to democratize investing, providing a tremendous array of investing options at a reasonable cost for millions of people. And given rapid advances in technology and the efficiencies that they can bring, the future looks even brighter, said Walter W. Bettinger II at the opening session of ICI’s 57th General Membership Meeting (GMM).
TOPICS: 401(k)EventsFund RegulationGMMMutual FundShareholder
On Fiduciary Rule, New York Times Relies on Fatally Flawed Research
By Paul Schott Stevens
April 8, 2015
Today I submitted the following letter to the editor of the New York Times:
TOPICS: 401(k)Fund RegulationInvestment EducationRetirement PolicySavingsShareholder
Statement of the Investment Company Institute at Senate Finance Committee Hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy”
By Brian Reid
September 16, 2014
This statement was given on behalf of ICI by Brian Reid, chief economist, at the Senate Finance Committee’s hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy.” For more information, see ICI’s full written testimony.
TOPICS: 401(k)Government AffairsInvestor ResearchMutual FundRetirement PolicyRetirement ResearchSavingsTaxes
Happy Birthday ERISA! Congratulations on 40 Years
By Sarah Holden and Elena Barone Chism
September 2, 2014
Today marks the 40th birthday of the Employee Retirement Income Security Act (ERISA). Signed into law on September 2, 1974, ERISA introduced bold steps to safeguard Americans’ employer-sponsored pensions and created the individual retirement account (IRA). Assets earmarked for retirement totaled $0.4 trillion at year-end 1974 (see the figure below). At this modest start, private-sector defined benefit (DB) plans accounted for 35 percent of the total; federal, state, and local plans for 34 percent; private-sector defined contribution (DC) plans for 17 percent; annuities for 13 percent; and there was a mere glimmer of IRA assets by year-end. Currently, total U.S. retirement assets are $23.0 trillion, and their composition has shifted considerably over the past 40 years.
TOPICS: 401(k)Fixed IncomeGovernment AffairsInvestment EducationInvestor ResearchPolicy ResearchRetirement PolicyRetirement ResearchSavingsTaxesTreasury
Industry Leaders Address Evolving Industry Challenges and Opportunities
By Miriam Bridges
June 9, 2014
In conversations exploring outcome-oriented investing, the globalization of the fund industry, and the next generation of retirement plans, industry leaders offered their perspectives on serving investors in an evolving world during several insightful sessions at ICI’s annual General Membership Meeting, held in Washington May 20–22.
TOPICS: 401(k)EventsGMMInternationalMutual FundRetirement PolicySavingsShareholder
Industry Leaders Reflect on Serving Investors in an Evolving World
By Christina Kilroy
June 4, 2014
Speaking on the Leadership Panel held Wednesday, May 21, at ICI’s General Membership Meeting (GMM), fund industry leaders agreed that challenges as well as opportunities abound for their businesses in today’s complex world.
TOPICS: 401(k)EventsFederal ReserveFinancial MarketsFinancial StabilityFund GovernanceFund RegulationGMMGovernment AffairsInvestment EducationMutual FundRetirement PolicyShareholder
Headlining ICI’s GMM, Blair Talks of Tough Challenges, Vast Opportunities
By Rob Elson
May 21, 2014
Challenges abound in our increasingly global world, said Tony Blair, former prime minister of the United Kingdom. Yet our future could be brighter than ever, he insisted.
Blair’s stirring words came during a keynote speech at ICI’s 56th General Membership Meeting (GMM). After his opening remarks, Blair sat down with ICI Chairman Bill McNabb, Chairman and CEO of The Vanguard Group, to discuss a range of issues. The session headlined the three-day meeting, which began yesterday in Washington, DC.
TOPICS: 401(k)EventsFinancial MarketsFund RegulationGMMInternationalMutual Fund
GMM Policy Forum: BlackRock’s Larry Fink Speaks with ICI’s Paul Stevens
By Todd Bernhardt
May 21, 2014
The fund industry needs to stop focusing on the moment and start focusing on outcomes when advising investors on their resources, said Laurence D. Fink, chairman and CEO of BlackRock, at ICI’s Annual Policy Forum, part of the Institute’s 56th General Membership Meeting (GMM).
TOPICS: 401(k)BondsEventsFinancial MarketsFund RegulationGMMInternationalInvestment EducationMutual FundRetirement PolicySavingsShareholderTreasury
Washington: Put Your (Retirement) Money Where Your Mouth Is
By Mike McNamee
March 4, 2014
When President Obama announced a new effort to expand access to retirement savings opportunities, ICI was among the first to applaud. The Administration’s “myRA” looks to provide a new option for Americans who want to put money aside for retirement, but who might not have access to a retirement plan through their workplace. These accounts would complement the wide array of investment options already available to these workers.
TOPICS: 401(k)Government AffairsInvestment EducationRetirement PolicySavingsTaxes
America’s Retirement System Is Strong
By Sarah Holden
December 18, 2013
One year ago, ICI released its landmark study, The Success of the U.S. Retirement System, a compilation of research from a wide range of sources, which found that the country’s retirement system is fostering economic security in retirement for Americans across all income levels.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
ICI’s Guide to Avoiding a Common 401(k) Tax Trap
By Mike McNamee
December 9, 2013
A tax trap for retirement savings is catching many smart people unaware. If allowed to go unchecked, it could harm the retirement savings of millions of Americans. A columnist for the Washington Post was just the latest in a long list of victims.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Yes, DC Follies Hurt Retirement Savers—But Let’s Not Overstate
By Brian Reid
October 10, 2013
“Debt ceiling follies” certainly do put retirement savers and their assets at risk. On that, ICI agrees with a recent Washington Post blog.
TOPICS: 401(k)Financial MarketsMutual FundRetirement ResearchSavings
Revenue Estimates of Restricting Tax Deferral: It Ain’t Necessarily So
By Peter Brady
September 20, 2013
Fifth in a series of posts about retirement plans and the policy proposals surrounding them.
In previous Viewpoints posts, I explained that retirement contributions are neither tax deductions nor tax exclusions, but rather are tax deferrals. I also explained why, in my opinion, the two most prominent proposals to restrict qualified deferred compensation are flawed (post three and post four).
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Tax Reforms Should Not Favor DB Plans over DC Plans
By Peter Brady
September 19, 2013
Fourth in a series of posts about retirement plans and the policy proposals surrounding them.
In The Tax Benefits and Revenue Costs of Tax Deferral and in two previous Viewpoints posts (post one and post two), I explained the benefits that workers get from deferring tax on compensation set aside for retirement.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
A ‘Modest’ Proposal That Isn’t: Limiting the Up-Front Benefits of Retirement Contributions
By Peter Brady
September 18, 2013
Third in a series of posts about retirement plans and the policy proposals surrounding them.
In two previous Viewpoints posts (post one and post two), I explained the benefits that workers get from deferring tax on compensation set aside for retirement.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Marginal Tax Rates and the Benefits of Tax Deferral
By Peter Brady
September 17, 2013
Second in a series of posts about retirement plans and the policy proposals surrounding them.
In a previous Viewpoints post, I discussed the difference between tax deferral—the tax treatment applied to retirement savings—and tax deductions and exclusions, such as the mortgage interest deduction or the exclusion of employer-paid health insurance premiums from income. The difference is often overlooked or misunderstood, leading to inaccurate analysis and harmful policy proposals.
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
Retirement Plan Contributions Are Tax-Deferred—Not Tax-Free
By Peter Brady
September 16, 2013
First in a series of posts about retirement plans and the policy proposals surrounding them.
In today’s fiscal and political climate, taxes are never far from politicians’ minds. Whether to achieve comprehensive tax reform or to raise revenue to meet budget deficits, members of Congress are now considering changes to a range of tax code provisions—including those governing retirement policy. Any comprehensive effort to address fiscal policy or tax reform should examine every option, but some discussions of retirement policy have been misguided. The tax treatment of retirement savings—tax deferral— too often has been lumped together with tax deductions (such as the deduction from income of mortgage interest expense) and tax exclusions (such as the exclusion from income of employer-provided health insurance premiums).
TOPICS: 401(k)Investment EducationMutual FundRetirement PolicySavingsShareholderTaxes
CAP Claims About the 401(k) System Are Misguided
By Paul Schott Stevens
September 4, 2013
The concerns of the Center for American Progress about the 401(k) system (covered August 20 in “A Better Way to Save for Retirement?”) are mistaken.
TOPICS: 401(k)Retirement PolicyRetirement ResearchSavings
Key Points to Remember on Fund Fees
By Sean Collins and Bob Grohowski
July 12, 2013
Over the past two decades, investors have paid less and less to own shares of mutual funds.
Americans Support Their 401(k)s
By Mike McNamee
April 25, 2013
It’s pretty obvious to anyone who reads ICI Viewpoints that we believe 401(k) plans are a successful part of an overall retirement system that is working for working—and retired!—Americans. But we’re far from the only ones who think so. Surveys show that Americans share this confidence in the 401(k) and support the key features of 401(k)s and other defined contribution (DC) plans.
TOPICS: 401(k)Retirement PolicyRetirement Research
The Facts on Fees and 401(k)s
By Mike McNamee
April 23, 2013
Consistently falling prices in a marketplace are usually a sign of competition and innovation.
TOPICS: 401(k)Retirement PolicyRetirement Research
The Facts on Limited Access to Retirement Funds Before Retirement
By Mike McNamee
April 22, 2013
One of the many strengths of the 401(k) system is its flexibility. Policymakers have built into 401(k) plans a careful mix of incentives that help workers save and preserve their savings for retirement—while still allowing limited access to their funds, in case of need, through hardship withdrawals and loans.
401(k) Plans Work in a Balanced Approach to Retirement Security
By Mike McNamee
April 19, 2013
What’s the outlook for American workers looking forward to retirement?
TOPICS: 401(k)Retirement PolicyRetirement Research
No Accident: The Strengths of the 401(k) System
By Mike McNamee
April 18, 2013
Americans have saved $5.1 trillion dollars in 401(k) and other defined contribution (DC) retirement plans—plus another $5.4 in individual retirement accounts (IRAs) that are funded largely by assets rolled over from DC and other employer retirement plans.
TOPICS: 401(k)Retirement PolicyRetirement Research
IRA Rollovers Serve Investors Well
By David Abbey and Sarah Holden
April 12, 2013
The U.S. Department of Labor (DOL) is preparing to reintroduce its controversial proposal to revise the long-standing definition of “fiduciary” under the Employee Retirement Income Security Act (ERISA).
Extra, Extra, Read All About It: Americans Are Preparing for Retirement
Mike McNamee
February 20, 2013
Data and academic research overwhelmingly show that Americans are taking care to prepare for retirement.
TOPICS: 401(k)Retirement Research
In Case You Missed It: “On Retirement Policy, Don't Mess with Success”
By Ianthé Zabel
January 28, 2013
In an op-ed for InvestmentNews, ICI President and CEO Paul Schott Stevens explains the importance of preserving incentives that help Americans save for retirement.
TOPICS: 401(k)Retirement Policy
401(k) Plans: Key in Helping Americans Achieve Secure Retirement
By Paul Schott Stevens
September 19, 2012
I submitted the following letter to the New York Times in response to a recent column on 401(k) plans:
The recent article, “Should the 401(k) be Reformed or Replaced” (Business Day, September 11), asks the wrong question.
401(k) plans play a key role in helping Americans achieve a secure retirement. 401(k)s have a remarkable track record of success in providing Americans incentives to save, invest, and think long-term. As of March 2012, Americans held $3.4 trillion in 401(k) plans.
TOPICS: 401(k)Retirement Policy
Fortune’s Assessment of Industry Stance on 401(k) Fees Is Misguided
By Sarah Holden and David Abbey
June 25, 2012
An article in the July 2 issue of Fortune about the 401(k) system mischaracterizes 401(k) fees and requires correction.
TOPICS: 401(k)Retirement Policy
The Future of Retirement and the Strengths of the 401(k) System
By Paul Schott Stevens
June 7, 2012
What is the future of retirement? In remarks today to Town Hall Los Angeles, I made the case that the 401(k) system will play a crucial role in building that future.
TOPICS: 401(k)Retirement Policy
Facts and Common Sense Undercut Distorted Demos View of 401(k)s
By Brian Reid
May 31, 2012
By many measures, the 401(k) system has been a tremendous success, helping millions of American workers prepare for retirement.
TOPICS: 401(k)Retirement Policy
Article in The Week Misrepresents Americans’ View of 401(k)s
By Sarah Holden
April 26, 2012
Contrary to recent reporting by The Week (“401(k)s Are Failing Millions of Americans,” April 22, 2012), American workers both value their 401(k) retirement savings plans and are confident that 401(k)s will help them meet their retirement goals.
TOPICS: 401(k)Retirement Research
An Important Step in the Process of Enhancing 401(k) Fee Disclosure
By Ianthé Zabel
February 3, 2012
On February 2, the Department of Labor (DOL) issued final regulations concerning 401(k) disclosures. The rule requires companies that administer defined contribution plans to disclose administrative and investment costs to employers who sponsor the plans.
TOPICS: 401(k)Retirement Policy
Deloitte/ICI Study Shows Retirement Plan Fees Driven Primarily by Plan Size, Asset Allocation
By Sarah Holden
November 16, 2011
According to a comprehensive new study, primary factors driving fees in 401(k) and other defined contribution retirement plans are the number of plan participants and average participant account balance, as well as the allocation of plan assets to equity investment options.
New York Times Editorial Misrepresents the Behavior of 401(k) Investors
By Brian Reid
August 23, 2011
TOPICS: 401(k)Retirement PolicyRetirement Research
401(k) Plans Help Keep Americans on Track
By Paul Schott Stevens
August 1, 2011
ICI sees strong evidence that the features of 401(k) plans help Americans avoid overreaction to financial turmoil, by countering extremes in investor behavior that hard times often produce.
This was one of the key points that I made recently at the Ayco Summer InnerCircle Benefits and Compensation Conference in Saratoga Springs, New York. I invite you to look over my full presentation, which contains a trove of data and charts pertinent to retirement policy.
TOPICS: 401(k)Retirement Policy
Let’s Set the Record Straight on 401(k)
By Paul Schott Stevens
April 13, 2011
As states and localities struggle to control their budgets, more and more policymakers are considering fundamental changes in the retirement plans offered to public employees. This year, at least eight states have taken up legislation to change part or all of their public retirement plans from traditional defined benefit (DB) pensions to defined contribution (DC) plans similar to the 401(k)s that that are now the most common plans in the private sector. Many more public employers are likely to consider such changes in coming years.
TOPICS: 401(k)Retirement Policy
Wall Street Journal Story Inaccurately Portrays the Role of 401(k) Plans
By Sarah A. Holden
February 24, 2011
The February 19 Wall Street Journal article, “Retiring Boomers Find 401(k) Plans Fall Short,” is based upon a narrow slice of statistics and anecdotes, painting an inaccurate portrait of the role of 401(k)s in retirement.
TOPICS: 401(k)Retirement Research
EBRI/ICI: Average 401(k) Account Balance Among Consistent Participants Rose Nearly 32 Percent in 2009
By ICI Viewpoints
November 22, 2010
The average 401(k) retirement account rose 31.9 percent in 2009, according to a report released today by the Employee Benefit Research Institute (EBRI) and the ICI analyzing a group of consistent participants.
TOPICS: 401(k)Retirement Research
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