Category: Planning for Retirees
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Fiduciary Papers #16: The Annuitization Decision and the Need for Conflict-Free Advice
In recent years a major development has occurred with respect to annuities … more and more insurance companies are offering annuity products with no commissions. These products can deliver more of the returns of the capital markets to the consumer. If offered to plan participants, such products could greatly enhance a retiree’s financial security and…
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Fiduciary Papers #15: The Prudent Investor Rule, 401k Accounts, and Tax-Efficient Investing
In the 401(k) world there has for many years been the option for plan participants to contribute to Roth 401(k) accounts, rather than traditional 401(k) account. For contributions to Roth accounts, no income tax deduction is provided, but (subject to certain requirements) the Roth account permits income-tax-free distributions after age 59-1/2 years. 401(k) accounts, and…
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A Rough Quarter-to-Date for Equities Brings Forth Higher Expected Returns
(As of Nov. 6, 2023) October 2023 was a rough month for investment returns, with asset class returns in these ranges (as implemented via Dimensional Funds Advisors’ mutual funds and ETFs): U.S. Large Company stocks: – 1.6% to -4.2%, approximately U.S. Small Company stocks: – 4.8% to -6.5%, approximately Foreign Developed Markets Small…
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Revisiting the Expected Returns of Various Asset Classes
September 30, 2023 After a stellar first half of 2023, the third quarter of 2023 saw losses in most U.S. stock asset classes, and even more significant losses in many U.S. real estate-related asset classes. Despite a dismal September, for the quarter foreign developed markets and emerging markets fared generally better. While there are many…
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Fiduciary Papers #12: The Prudent Investor Rule’s Requirement for Tax Efficient-Investing
OVERVIEW: THE PRUDENT INVESTOR RULE The Uniform Prudent Investor Act (UPIA) (1995), adopted in some form by all 50 states, applies to the investment of private trust funds. The Prudent Investor Rule, which forms the core of the UPIA, also applies in other contexts, such as to guardians, conservators, executors of estates, trustees of charitable…
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Fiduciary Paper #10: Is Proper Tax-Efficient Portfolio Design and Management a Duty, and is it Scalable?
I have increasingly witnessed registered investment adviser (RIA) firms, as well as brokerage firms, generally disavow (often in their client services agreement) any duty to manage the investment portfolios of their clients tax-efficiently, often through a blanket statement that “tax advice is not provided.” This post seeks to ask, and generally answer, two questions: First,…