How to Fine-Tune Your 401(k)

[mahatmakanejeeves]

How to Fine-Tune Your 401(k)

Weekend Investor
How to Fine-Tune Your 401(k)
Employers are rolling out new features to boost retirement savings.

By Kelly Greene
Jan. 24, 2014 6:19 p.m. ET

Do you need a retirement-account checkup? ... Many of us routinely ignore our 401(k)s and other savings plans for long stretches. Even opening the statements was often painful during the financial crisis.

But after a stellar year for stocks, the balances may now look far more comforting to investors who have a significant portion of their savings in equities, as many do. That presents a timely opportunity for a closer look at what else is different about your retirement plan today.
....

Evaluating Future Needs

For workers trying to decide how much to save, it is particularly important to figure out how their savings, and their savings rate, will translate into income in retirement. Unfortunately, making that calculation is complicated.
....

Indeed, the U.S. Department of Labor, which regulates 401(k) and other defined-contribution plans, last year asked the retirement industry for suggestions on how to show savers how much monthly income their assets might provide in retirement. The response was so overwhelming that Labor officials are still digging through the comments. (The department's own income calculator is at http://www.dol.gov/ebsa/regs/lifetimeincomecalculator.html).
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Write to Kelly Greene at [e-mail]

Employee Benefits Security Administration Lifetime Income Calculator

When the author says, "the U.S. Department of Labor ... last year asked the retirement industry for suggestions," what he's referring to is this:

EBSA Proposed Rules Pension Benefit Statements {5/8/2013}

Federal Register Volume 78, Number 89 (Wednesday, May 8, 2013)
Proposed Rules
Pages 26727-26739
From the Federal Register Online via the Government Printing Office http://www.gpo.gov
FR Doc No: 2013-10636

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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2520
RIN 1210-AB20
Pension Benefit Statements

AGENCY: Employee Benefits Security Administration, Department of Labor.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Department of Labor (Department) is developing proposed regulations regarding the pension benefit statement requirements under section 105 of the Employee Retirement Income Security Act of 1974, as amended (ERISA). This advance notice of proposed rulemaking (ANPRM) describes certain rules the Department is considering as part of the proposed regulations. The rules being considered are limited to the pension benefit statements required of defined contribution plans. First, the Department is considering a rule that would require a participant's accrued benefits to be expressed on his pension benefit statement as an estimated lifetime stream of payments, in addition to being presented as an account balance. Second, the Department also is considering a rule that would require a participant's accrued benefits to be projected to his retirement date and then converted to and expressed as an estimated lifetime stream of payments. This ANPRM serves as a request for comments on specific language and concepts in advance of proposed regulations. The Department intends to consider all reasonable alternatives to direct regulation, including whether there is a way short of a regulatory mandate that will ensure that participants and beneficiaries get constructive and helpful lifetime income illustrations.

You can find things in the Federal government, but you have to be determined.

To read the comments go to Regulations.gov and enter the docket number RIN 1210-AB20 in the search box.

[doc03]

1. That is an improvement but they can't match the old DB plans at least it gives people

an idea how much money the really need. We had a DB plan that the company offered to buy out. In my case they offered me
$106000, they had a representative from Met Life there. The Met Life guy told me I could buy an immediate annuity that would pay me
a little over $600 a month the rest of my life. The DB pension would pay me $1118 the rest of my life. I left my money in the pension but
90% of the guys took the cash. Then the really sad part of it instead of buying an annuity most of them bought toys with it. I run into those guys all the time
now that claim the company screwed them out of their pension.