Happy Friday, readers! This week’s news roundup features articles on investing. Active fixed-income allocations are moving into risky territory. Corporate funds posted the highest returns among institutional investors in the second quarter. While usage of Roth 401(k)s is still quite small, at 13%, the popularity of Roth 401(k)s is growing. Some plan sponsors are using both target-date funds and managed accounts as their qualified default investment alternative, moving older investors into the managed accounts. While managed accounts are customized for each participant, experts say they can be benchmarked against participant’s goals, such as when they want to retire or how much they want to save. We hope you find our coverage helpful and informative.
Experts with Charles Schwab warn that a decade of generally stable credit markets has some investors feeling a false sense of security about “stretching for yield” within near retirees’ target-date funds.
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It appears some last-minute amendments have largely removed controversial provisions from the Senate’s version of tax reform legislation that would have had a big impact on governmental 457 and nonprofit 403(b) plan sponsors.
The American Retirement Association says that tax reform could be a disincentive for small businesses to offer retirement plans; however, as one reader shares, there are counter considerations having to do with Roth 401(k) options that could mitigate some of the concern.
The legislation would take steps to provide additional anti-cutback protections for Teamsters, miners, and other unionized American workers who have paid significant sums into multiemployer pension funds.