Systematic withdrawals from DC plans are one of the simplest and cheapest ways to generate income from tax-deferred savings in retirement. Rollovers get the headlines, but more people advocate SWPs than you might have thought.
If more 401(k) plans offered systematic withdrawals, more money might stay in 401(k)s, and the DOL might not need to attempt the difficult and divisive task of policing rollover IRAs.
Systematic withdrawals from 401(k) plans are a widely-available but rarely-used way to create retirement income. Perhaps because electronic transfers are virtually free, nobody's championing them.
Investment performance of popular “Rep-as-Portfolio-Manager" accounts lags direct-sold packaged portfolios, say analysts at Cerulli Associates and Fuse-Research.
A phrase in the DOL's new Best Interest exemption could make it very hard for broker-dealer reps to accept commissions on the sale of variable annuities and proprietary mutual funds to IRA owners.
Britain's public-option defined contribution plan, NEST, thinks that a decumulation strategy that used tax-deferred savings to fund a small cash bucket, a big income-generating bucket and a longevity annuity might work best for the most people.
"Unless the underlying problems are addressed head-on, short-term gain may be purchased at the price of long-term pain," warn the authors of the bank's 85th annual report on the global economy.