- 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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The future of the Department of Labor’s Fiduciary Rule is in limbo following a memorandum released last Friday by President Trump. While a draft memo released earlier in the day delayed the implementation date by 180 days, the final memo did not contain such language. Rather, the final version of the memo directs the Department of Labor to re-examine the Rule to determine whether it may adversely affect the manner in which American can receive financial advice.read more
On October 27, 2016, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2017. While employee deferral limits have stayed the same, other important limits have changed.read more
Last week’s vote by the British electorate to end its 43-year membership in the European Union seems to have taken just about everybody by surprise, but the aftermath could not have been more predictable. The uncertainty of how, exactly, Europe and Britain will manage a complex divorce over the coming decade sent global markets reeling. London’s blue chip index, the Financial Times Stock Exchange 100, lost 4.4% of its value in one day, while Germany’s DAX market lost more than 7%. The British pound sterling is getting crushed (down 14% against the yen, 10% against the dollar).read more