Archive for the tag 'Retirement'

Fidelity Targets Retirement Income Needs

Kurt Brouwer October 13th, 2007

This particular topic is a pretty hot one in the relatively staid world of mutual funds right now. Essentially, mutual fund companies want to compete more effectively with life insurance companies in meeting the retirement income needs of millions of upcoming Baby Boom retirees. Unfortunately, the topic is littered with appeals to emotion and confusion over how income is defined, but that’s nothing new, whether we’re talking about insurance companies or Wall Street.

Susan Kelly at Financial Week reports, Fidelity Seeks To Provide Cash for Retirees With Income Needs [emphasis added]:

‘…Brokerage giant Fidelity Investments today rolled out two new products—a set of mutual funds and a variable annuity—designed to help baby boomers turn their nest eggs into a steady stream of retirement income.

“What we hope these two products do is add another option in the solution set [baby boomers] have for their retirement income,” said Boyce I. Greer, president of the fixed income and asset allocation division of Fidelity Management & Research.

As the 78 million baby boomers begin to retire, the financial services industry is increasingly focused on the issue of generating income for them in retirement. That is perceived to be a bigger problem than it was for earlier generations of retirees because boomers are less likely to have traditional company pension plans, and their Social Security payments will replace less of their pre-retirement income. Last week Vanguard announced three Managed Payout Funds, funds of funds that help retirees generate income from their investments by providing monthly payments.

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Hot Links: Healthcare, Health Insurance & Medicare

Kurt Brouwer October 5th, 2007

The Federal government and private industries such as General Motors and John Deere & Co. are grappling with what to do about spiraling costs for healthcare and health insurance. Here are short snippets from longer articles on this issue:

Means Test Sought for Medicare Drug Plan (Jonathan Weisman, 10/05/07, Washington Post)

The Bush administration is advancing a proposal to levy higher premiums and deductibles on upper-income seniors enrolled in Medicare’s new prescription drug benefit, raising fees on beneficiaries with incomes over about $80,000 a year, administration officials said yesterday.The administration is working with Sen. John Ensign (R-Nev.) to attach to upcoming legislation a “means testing” provision that would save the government billions of dollars. In the past, however, similar proposals have been blocked by the furious response of seniors.

“You say it saves money and these people can afford it, but it also eats away at the incomes of seniors. It erodes their sense of the reliability on these federal programs, and it certainly erodes political support,” said John Rother, policy director for AARP, the powerful senior lobby.

The GM-UAW Contract: Pace Car for the U.S.? (October 1, 2020, Christian Science Monitor)

Detroit’s autumn tradition of unveiling new car models has gone the way of fin wings and chrome grills. This fall, however, GM and the UAW did roll out a new model for the American economy. Their proposed contract signals a new urgency in the US to step up to global competitors.

Concessions by both General Motors and the United Auto Workers were both huge and atypical, possibly setting new and healthy directions for unions, industry, and the healthcare debate…

…For the UAW, the task ahead is to run a new type of healthcare enterprise, called a “voluntary employee beneficiary association”(VEBA). GM’s initial contribution of $30 billion to VEBA will keep it going for a while. But some VEBAs in other industries have failed. The UAW must show that a consumer-driven healthcare system can work by restraining costs, such as providing incentives for preventive healthcare.

Any success with this type of private healthcare could alter the debate over government versus private systems. The current dispute over increased federal funding for children’s health in Washington would take the US further toward government-run care. But major Democratic presidential candidates have shifted to emphasizing private systems.

Deere Retirees Face Healthcare Choice (Jennifer DeWitt, October 4, 2020, Quad-City Times)

A change in health-care benefits announced for some Deere & Co. retirees will require they be more involved in the decision-making on their coverage, company officials said Monday.

Two weeks ago, the Moline manufacturer announced it was changing the health-care benefit programs for nearly 5,000 of the company’s 28,000 U.S. retirees and their dependents. The company began hosting a series of meetings with retirees Monday to educate them on the changes, which take effect Jan. 1.

In a conference call with reporters Monday, Glenn Huston, the company’s employee benefits manager, said the new program changes how benefits will be delivered to the retirees. While Deere’s financial support will be comparable, he said the new program changes how coverage is purchased.

One of the biggest changes is that retirees now will have to enroll for health coverage with a third-party insurer and “tailor coverage they elect to their own individual situations,” he said. “They will no longer sign up through John Deere, but John Deere will be providing them with support.”

We really do not know how all this will work out. However, we do know that lots of attempts are being made to find solutions to the dilemma faced by both government and industry when it comes to funding the health insurance needs of retirees.