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Retirement Roundup: This investing expert says there’s a big problem with index funds

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A digest of timely information and insight about finance, investing, and retirement.

Investing legend says there’s a big problem with index funds | Time
A generation ago, Jack Bogle invented the index fund. Now he’s warning his creation may have a negative impact on the stock market. Bogle, who founded The Vanguard Group in 1974, wrote recently in The Wall Street Journal that if current trends continue, index funds will soon own half of all U.S. stocks. He thinks that could lead to a dangerous vacuum in corporate governance – with nobody to effectively police the corporate executives who run America’s largest companies. “Public policy cannot ignore this growing dominance, and consider its impact on the financial markets, corporate governance, and regulation,” he wrote. “These will be major issues in the coming era.”

Many retirees outspend planned budget | PlanSponsor
Thirty-nine percent of retirees are spending more than they had expected, according to the “Global Atlantic Retirement Spending Study: Perception vs. Reality.” Forty-nine percent of pre-retirees believe planning for retirement is more difficult for them than it was for their parents. The typical non-retired U.S. consumer older than 40 spends an average of $2,993 a month, and retirees spend 32 percent less ($2,008), according to Global Atlantic Financial Group. The areas where retirees are spending less are entertainment (29 percent less), dining out (24 percent less), traveling (18 percent less) and on housing (23 percent less on mortgage payments and 22 percent less on rent).

Don’t retire early unless you can answer “yes” to these 4 questions | Motley Fool
Retiring early is a dream for many, but jumping the gun by retiring too early can leave you pinching pennies at the end of your life when your savings run dry. Before you decide to retire, it’s important to make sure all of your finances are in order to avoid this grim picture. The four questions you should be able to answer “yes” to if you’re truly ready for a premature retirement relate to your debt, savings, health care plan, and retirement account withdrawals.

By choice or necessity, more adults are working past retirement age | Denver Post
A National Press Foundation seminar in Washington, D.C., earlier this year explored the topic of why Americans are working longer. “The population is getting older, fertility rates are quite low, and people are living longer,” Richard Johnson, director of the program on retirement policy at the Urban Institute, said during the seminar. Johnson provided several reasons for the change in the labor landscape, including tightening of labor markets, pension uncertainty, and the availability of less physically demanding jobs.

Everyone is having some trouble saving for retirement | CNBC
In a perfect world, saving for retirement would be easy. That world assumes everyone makes an adequate salary, can afford all their necessities and a few frills, and feels comfortable setting aside some money for the future. Yet the reality is that retirement saving is not easy for everyone. Lower income and debt, whether from credit cards or student loans, are two items that can make it difficult to save for the future. When 30 percent of people surveyed by Stash feel financially squeezed, they start eyeing retirement contributions as a place to cut back. The investing app surveyed more than 2,100 people online in November.

Are you retirement ready? Easy fixes for 4 common planning mistakes | Forbes
The 2018 Retirement Confidence Survey (RCS) conducted by the Employee Benefit Research Institute (EBRI) and research firm Greenwald & Associates, found that only 32 percent of retirees are very confident in their ability to live comfortably throughout retirement. But what does that mean for the remaining 68 percent of retirees who are less confident? Equally important, what does it mean for working Americans actively saving for life in retirement?


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