Data & Research June 22, 2009

Analysis Gives Hope for Pre-Retirees' Savings Recovery

A new study found that pre-retirees can recover their lost savings.
Reported by

Financial Engines said its new analysis on the impact of the market decline in 2008 on investors nearing retirement found that even for investors within five years of retirement, modest increases in savings combined with slightly delayed retirement can recover their pre-2008 retirement outlooks if they stay in a diversified, age-appropriate portfolio.

According to a press release, many 401(k) participants assume that the large portfolio losses experienced in 2008 mean needing to work five or 10 years longer than planned, but Financial Engines’ analysis shows that large portfolio losses do not translate into equally large percentage decreases in projected retirement income.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

The reason for this is retirement income that will be generated from future savings or Social Security benefits is not affected by the 2008 decline. Therefore, for near-retirees who began 2008 on track to meet their retirement goals, typical portfolio declines of 23% to 30% resulted in a decrease of only 10% to 19% in their projected median retirement incomes

The analysis does suggest that delaying retirement and increasing savings are two powerful levers for getting participants back on track to meet their retirement goals, but for many near-retirees, delaying retirement by only two to three years can get them back on track without any increase in annual savings.

Delaying retirement is effective because it compounds several factors: allowing more years of savings, giving savings more time to grow, decreasing the number of years of retirement spending that need to be funded, and increasing Social Security benefits.
On the other hand, those 401(k) participants who reacted to declining equity markets by moving all of their balances into money market funds or other fixed income investments have more work to do to get back on track, the announcement said. The analysis found that these investors are likely to have to delay retirement as much as four years above and beyond the other steps needed to recover from the 2008 declines.

Deals & People June 22, 2009

Janus Adds Institutional Sales Director

Capital Group Inc. has appointed Jason Stefanelli as vice president and institutional sales director with Janus Capital Group Institutional.
Reported by

Stefanelli will be responsible for marketing Janus, Perkins and INTECH-managed strategies to corporations, foundations and endowments in the Northeast region of the U.S. and to the institutional market in Canada, a press release said. Stefanelli reports to Dan Charles, executive vice president and managing director of Janus Capital Group Institutional.

Prior to joining Janus, Stefanelli served as vice president with Wellington Management Company, LLP, where he was responsible for the firm’s business development and consultant relationship efforts in Canada, according to the announcement. Prior to that, Stefanelli was a principal at State Street Global Advisors in Toronto, where he managed the firm’s Canadian consultant relations business and was involved in client service and institutional business development. His background also includes corporate finance, brokerage and mutual fund experience for firms such as Spectrum Investments Inc. and Scotia McLeod Inc.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Stefanelli is also a member of the Treasury Management Association of Canada (TMAC), the New England/Canadian Business Council and the Association of Canadian Pension Management (ACPM). He formerly served as Treasurer of the Canadian Pension Benefits Institute (CPBI).

«