Solving the retirement income challenge is so difficult because plan participants all have different longevity expectations, different beliefs about how they would like to live in retirement, and different conclusions about how to weigh longevity risk versus the risk of under-consumption. Making matters even more difficult, survey data shows that plan sponsors are not necessarily thinking strictly about annuities when contemplating the addition of an in-plan retirement income option.
Anxiety about turning DC plan assets into a “lifetime retirement paycheck” in such a low-rate environment is keeping aging Americans in the workforce—including many who very likely have enough money saved to retire comfortably and don’t want to keep working.
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Besides failing to invest the money within the IRS’s 60-day window—the most common mistake according to the experts—another frequent error impacts those who cash out of their workplace retirement plan.
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Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.
A newly filed settlement agreement stipulates that Norton Healthcare and Lockton will each pay half of a total settlement of $5.75 million, which will be used to compensate plan participants who invested in overly expensive share classes.