- Inflation – transitory or more durable? First, an inflation definition and its effects are appropriate. Inflation is the decline of purchasing power of a given currency over time. The rise in the level of prices means that a unit of currency effectively buys less than it did in prior periods. For example, an inflation rate of 2% as we’ve generally seen over the last few decades in the US cuts purchasing power in half in a fairly distant 35 years. However, a 4% inflation rate cuts your savings in half in only 17 years. Hence the reason people invest in risk-assets to try to outpace inflation. Extreme inflation expectations today range from those that believe we will never climb out of the disinflationary vortex to those that believe inflation is about to go on a huge ascent. Likely, the truth is somewhere in the middle and the current inflation figures have been somewhat distorted to the upside with various supply bottlenecks.
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- Redefining the Retirement Plan is Axia’s guide to trends and strategies that will help employers get the most out of their retirement programs. Defined Benefit plans and Social Security have been the simple answer to retirement for the past century. Life expectancy has improved though and an added strain has been placed on plan sponsors to help their employees replace their incomes in retirement. Fortunately, employers are equipped with more tools than ever before to help their employees retire with dignity.
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One tax-efficient way to save for retirement healthcare expenses is through a Health Savings Account (HSA) coupled with a High Deductible Health Plan (HDHP). Even though the HSA savings vehicle was created in 2003, it has generally been misunderstood and is just beginning to gain legitimate acceptance. With the recent interest, many people have questions pertaining to these accounts. Below are some of the more common questions.read more
The SSA highlights some sobering statistics that confirm what studies have shown: most people have not saved enough for retirement. As a result, people are not determining their Social Security benefit timing. Instead, benefits usually begin immediately after gainful employment ends as their savings buffer is limited. For prepared investors, the goal is to make an active decision on benefit commencement.read more
On June 9, 2017, the Department of Labor’s Fiduciary Rule went into effect. The rule, also known as the Conflict of Interest Rule, expands the fiduciary definition under the Employee Retirement Income Security Act of 1974 (ERISA). In the simplest terms, the DOL Fiduciary Rule will require advisors to put their client’s interests ahead of their own when giving advice to retirement accounts such as 401(k)s and IRAs. Further, any potential conflict of interest must be disclosed along with a clear statement of the fees and commissions received in exchange for the advice.read more