Talking Points

Reported by PLANADVISER staff

COVID-19-Related Withdrawal Regret?

Of those who took loans or withdrawals from their retirement plan …

said they’re in a better place financially due to the withdrawal
68%
said they took more money than they needed
47%
Source: Voya Financial

To Set It and Forget It Can Affect Returns

Managers of target-date funds are favoring their own fund ­families at the expense of performance when investors have a set-it-and-forget-it mentality. Performance is lower than that of nonaffiliated funds by 2.9 basis points for each year from the vintage year. For an investor holding the fund for 50 years, that indicates a 21% reduction in performance.

Source: The Unintended Consequences of Investing for the Long Run: Evidence From Target-Date Funds

Medical Costs When Retiring Today

Source: Fidelity’s 20th Annual Health Care Cost Estimate

Plan Leakage

Twenty-two percent of net contributions to workplace retirement savings plans made by those age 50 or younger are withdrawn early in the form of hardship withdrawals, loans or cash-outs due to a job termination.

Source: The Congressional Joint Committee on Taxation