Retirement Investment Digest

“I think ETFs … can absolutely revolutionize the way 401k plans are put together and operated”

WisdomTree Investments , one of the few firms that creates and maintains the indexes that underlie its exchange-traded funds [ETFs], has added another dimension to its business. via ETF Investor

The father of index fund investing, John (also known as Jack) Bogle has written a number of investing books. Discover the best books written about or by Vanguard founder, John…

“You can’t go to work. We’re in charge today.”

Rank & File Solidarity Can Reverse Historic Retreat by Martha Grevatt/Workers World Magazine On Oct. via Futureoftheunion.com

There’s an important deadline on the horizon if an employer has a SIMPLE in 2007 but would like a 401(k) in 2008. It’s November 1. The employer must provide notice to employees at least 60 days prior to the start of the next calendar year or no later than November 1, 2007 that the SIMPLE will not be maintained in 2008.

So why change from SIMPLE to 401(k)? A  SIMPLE retirement plan is called "simple" for obvious reasons. It’s easy to establish, relatively inexpensive, and also easy to maintain. But if an employer wants to:

• Not cover practically all employees
• Make larger contributions
• Favor owners and highly compensated employees
• Not have 100% vesting of employer contributions
• Maybe have better investment options
• Have the Roth option
• Allow for plan loans
• Be able to buy tax deductible life insurance
• Have better creditor protection

Then, the employer needs a profit sharing/401(k) plan. And yes, it is more complicated to maintain and accordingly more expensive. Retirement planning is a lot like life. It’s a series of trade offs.

Side Note: A SIMPLE can be rolled over to a 401(k) plan after a "2-year period" which begins on the date which the individual first participated in the SIMPLE.

“It does not matter how good of job someone has, if they want to acquire wealth in this life, at some point they are going to have to invest in something.”

Many people consider that it is impossible to earn money on HYIP market, one is full of SCAMs. via Buzzle.com

That’s what Social Security Commissioner Michael Astrue is calling the expected avalanche of applications from the post-World War II generation. The "first" Baby Boomer, a retired school teacher from New Jersey, born one second after midnight on January 1, 1946 ,applied for Social Security benefits Monday, signaling the start of an expected avalanche of applications from the post World War II generation. An estimated 10,000 people a day will become eligible for Social Security benefits over the next two decades, Commissioner Astrue said. The Social Security trust fund, if left alone, is projected to go broke in 2041.

And now it’s up to the politicians.

Here is a link to the story carried by Yahoo with a hat tip to Mario Cinardi, World Financial Group.

A new SEC rule went into affect yesterday allowing fund companies to request trade data from 401(k) administrators. Unknowing 401(k) investors may be hit with charges they don’t expect.

In an…

A few days ago, I wrote about the Department of Labor’s new interactive website called elaws-ERISA Fiduciary Advisor which provides an overview of the basic fiduciary responsibilities applicable to retirement plans under the law.

The Internal Revenue Service adds to the tools to help retirement plan sponsors deal with common 401(k) mistakes. It’s a 43 page PDF document that includes hypertext links that take the reader from a particular item in a chart to a detailed discussion within the document about that item. In addition, the discussions include hypertext links that jump to other IRS documents on the web (if connected to the Internet), such as checklists and revenue rulings. The chart lists 11 common, potential mistakes in 401(k) plan operation and documentation.

Here is the link for you to download it.

“Japan’s 401K is useless because the [maximum contribution] that is tax exempt is set so low”

Japan needs to revamp its 401K defined contribution pension plan to encourage a shift from savings to investment and stimulate the country’s financial sector, according to the head of Japan’s largest asset … via Financial Times

“Everybody ought to feel a certain level of anxiousness around America’s preparedness for retirement, because every chain is as strong as its weakest link.”

Employers have begun to discover troubling racial differences within their 401 retirement plans, a gap they say could leave today’s black workers far less financially prepared for retirement than whites. via TulsaWorld.com - Business