Retirement Roundup: Women outlive men yet retire earlier

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

Women outlive men. Why do they retire earlier? | New York Times
Based on current life expectancy tables, a typical girl born in the United States today will most likely live until she is almost 87 years old — nearly four years longer than a typical boy born in 2018. But if current trends remain in place, she will probably earn less than he will, thanks in part, to a career that may be delayed or interrupted by bouts of caregiving, including motherhood. That’s what the statistics show.

The case for using an institutional approach for DC plan investments | PlanSponsor
A report, “Defined Contribution Investments on Trial,” from the Institutional Relationship Group at PGIM, the asset management arm of Prudential Financial, notes that recent lawsuits have challenged the investment menu selection approach of many Defined Contribution (DC) retirement plans. Some plans use what PGIM calls the Retail Approach with a primary focus on appealing to what is believed to be what participants want, using a wide array of choice and an emphasis on name recognition. Others use what PGIM calls the Simple Approach, focusing on minimizing fees and maximizing simplicity, using heavy or exclusive use of passively managed funds and basic asset classes.

Medicare allows more benefits for chronically ill, aiming to improve care | New York Times
Congress and the Trump administration are revamping Medicare to provide extra benefits to people with multiple chronic illnesses, a significant departure from the program’s traditional focus that aims to create a new model of care for millions of older Americans. The changes — reflected in a new law and in official guidance from the Department of Health and Human Services — tackle a vexing and costly problem in American health care: how to deal with long-term illnesses that can build on one another, and the social factors outside the reach of traditional medicine that can contribute to them, like nutrition, transportation, and housing.

Firms offer framework for planning for retirement costs | PlanSponsor
Vanguard has issued a new framework, jointly developed with Mercer, that helps pre-retirees and retirees better understand the financial planning implications of annual health care costs and long-term care expenses. The research paper, “Planning for healthcare costs in retirement,” outlines key health care cost factors and personal considerations, as well as frames health care expenses as an annual cost rather than a lifetime lump sum.

The media’s coverage of retirement saving really is terrible | Forbes
Americans worry about retirement, and understandably so. Not because there’s an actual retirement crisis in the making, but because Americans are everywhere told that there is. A recent lengthy Wall Street Journal treatment of Americans’ retirement savings – titled “A Generation of Americans Is Entering Old Age the Least Prepared in Decades” – is one of the most depressing examples. The Journal’s coverage of Americans’ retirement prospects serves up flawed data tied to touching, but unrepresentative personal case studies, all the while ignoring clear indications that retirement savings and retirement incomes have never been higher.

Asset classesA category of similar investments. Common asset classes include global equity (such as publicly traded stocks), real estate, and cash.Defined contributionA type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.Defined contributionA type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.Asset classA category of similar investments. Common asset classes include global equity (such as publicly traded stocks), real estate, and cash.