{"product_id":"the-retirement-plan-solution-isbn-9780470398852","title":"The Retirement Plan Solution","description":"\u003cb\u003ePraise For \u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e\u003c\/b\u003e  \u003cp\u003e\"Short, clear, complete, and always interesting. Best book on DC plans and what we should do-now.\"\u003cbr\u003e —\u003cb\u003eCharles D. Ellis\u003c\/b\u003e, author, \u003ci\u003eWinning the Loser's Game\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\"At a time when the world is in turmoil, along with retirement expectations, the authors have hit a home run. After reading this book, I have a plan. Read it for your path to retirement security.\"\u003cbr\u003e —\u003cb\u003eDallas Salisbury\u003c\/b\u003e, President and CEO, Employee Benefit Research Institute\u003c\/p\u003e \u003cp\u003e\"\u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e offers a refreshing and provocative perspective on how to assess retirement needs, save to meet these needs, and manage the retirement payout process. In this time of financial turmoil, employees, plan sponsors, and financial advisors will find this highly practical resource volume both useful and humorous.\"\u003cbr\u003e —\u003cb\u003eOlivia S. Mitchell\u003c\/b\u003e, Director, Pension Research Council, Wharton School\u003c\/p\u003e \u003cp\u003e\"\u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e is a map to the future of 401(k) retirement plans. But it is not just a theoretical view of what could be. Instead, the authors describe the needs and trends that are already here, and then describe the changes that are developing to meet those needs. It is about the tomorrow that is happening today.\"\u003cbr\u003e —\u003cb\u003eFred Reish\u003c\/b\u003e, Managing Director, Reish Luftman Reicher \u0026amp; Cohen\u003c\/p\u003e \u003cp\u003e\"The respected authors have created a readable, timely, and very helpful book on all aspects of retirement planning. The suggestions are practical, the information is concise, and the book is highly recommended for anyone that is interested in sound financial planning.\"\u003cbr\u003e —\u003cb\u003eMoshe A. Milevsky, PhD\u003c\/b\u003e, Finance Professor, York University, Toronto, Canada\u003c\/p\u003e \u003cp\u003e\"This is a must-read for people working in the retirement industry, as well as those who simply care about how to improve their chance of reaching a financially secure retirement. In a clear and simple fashion, the authors deliver one of the best books to date on inefficiencies in the current DC plan and potential improvements.\"\u003cbr\u003e —\u003cb\u003ePeng Chen\u003c\/b\u003e, President, Ibbotson Associates\u003c\/p\u003e \u003cp\u003ePreface xiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xix\u003c\/p\u003e \u003cp\u003e\u003cb\u003eIntroduction \u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Great American Retirement System? 1\u003c\/p\u003e \u003cp\u003eDefined Benefit and Defined Contribution 2\u003c\/p\u003e \u003cp\u003eThe Dynamics of the Retirement Plan 3\u003c\/p\u003e \u003cp\u003eRoom for Improvement in the Accumulation Phase 4\u003c\/p\u003e \u003cp\u003eThe Right Sort of Education 5\u003c\/p\u003e \u003cp\u003eOther Ways of Running Defined Contribution Plans 6\u003c\/p\u003e \u003cp\u003eThe Individual’s Role in Decumulation 7\u003c\/p\u003e \u003cp\u003eThe Plan Sponsor’s Role 8\u003c\/p\u003e \u003cp\u003eA Final Thought: From Biggest to Best 9\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 DC Version 2.0 11\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eComing of Age 12\u003c\/p\u003e \u003cp\u003eThe New Retirement Superpower 13\u003c\/p\u003e \u003cp\u003eComing Soon to a Dictionary Near You: DBization 14\u003c\/p\u003e \u003cp\u003eAt the Heart of Version 2.0: A Different Objective 15\u003c\/p\u003e \u003cp\u003eIncome Replacement 15\u003c\/p\u003e \u003cp\u003eIs This the First Nail in the Coffin of Defined Contribution? 16\u003c\/p\u003e \u003cp\u003e“Hold on a Second . . .” 17\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One The Dynamics of the Retirement Plan\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 More than You Ever Wanted to Know about Life Expectancy 21\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhat Is “Life Expectancy”? 21\u003c\/p\u003e \u003cp\u003eHow Life Expectancy Has Changed 22\u003c\/p\u003e \u003cp\u003eBut an Individual’s Life Span Is Uncertain 23\u003c\/p\u003e \u003cp\u003eLongevity Distributions: Let’s Take a Look 26\u003c\/p\u003e \u003cp\u003eWhat Does This Mean? 29\u003c\/p\u003e \u003cp\u003eAnd Will Longevity Improve Even More? 30\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Retirement Is Expensive 31\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Goal Is a Targeted Level of Income Replacement 32\u003c\/p\u003e \u003cp\u003eThe Fundamental Pension Equation and the Defined Benefit System 33\u003c\/p\u003e \u003cp\u003eA Simple Model of Retirement Plan Accumulation and Decumulation 34\u003c\/p\u003e \u003cp\u003eBase Case Results 34\u003c\/p\u003e \u003cp\u003eWhen to Start Saving 37\u003c\/p\u003e \u003cp\u003eThe Base Case May Not Be a Reliable Guide 38\u003c\/p\u003e \u003cp\u003eHow to Act in the Face of Uncertainty 39\u003c\/p\u003e \u003cp\u003eAppendix: Further Analysis of the Uncertainty Associated with Investment Returns 41\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Investment Returns Are All-Important 43\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe 10\/30\/60 Rule 44\u003c\/p\u003e \u003cp\u003eGames at a Virtual Casino 46\u003c\/p\u003e \u003cp\u003eInvestment Analogs 48\u003c\/p\u003e \u003cp\u003eHistorical Return Patterns 49\u003c\/p\u003e \u003cp\u003eWhat Are the Lessons? 52\u003c\/p\u003e \u003cp\u003eWhat Follows? 54\u003c\/p\u003e \u003cp\u003eHow Much Investment Risk Can You Tolerate? 54\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Sustainable Spending 57\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLifetime Annuities 57\u003c\/p\u003e \u003cp\u003eSimulations 58\u003c\/p\u003e \u003cp\u003eAppendix: The Multiple 61\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two Opportunities in the Accumulation Phase\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Save More 65\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEmployers with No Plan 65\u003c\/p\u003e \u003cp\u003eEmployees Who Do Not Enroll 67\u003c\/p\u003e \u003cp\u003eEmployees Who Start Saving Too Late 69\u003c\/p\u003e \u003cp\u003eEmployees with Low Savings Rates 70\u003c\/p\u003e \u003cp\u003eEmployees with Gaps in Continuous Participation 72\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Limit Leakage 75\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCashing Out 75\u003c\/p\u003e \u003cp\u003eLoans 76\u003c\/p\u003e \u003cp\u003eHardship Withdrawals 77\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Invest Better 81\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEvidence of Waste 81\u003c\/p\u003e \u003cp\u003eThe Importance of a Good Default Option 83\u003c\/p\u003e \u003cp\u003eThe “Target Date” Solution 84\u003c\/p\u003e \u003cp\u003eAnd for the Investment Experts? 89\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Reduce Fees 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Impact of Fees 91\u003c\/p\u003e \u003cp\u003eFees for What? 92\u003c\/p\u003e \u003cp\u003eLooking for Fee Leakage 92\u003c\/p\u003e \u003cp\u003eFee-Sharing Arrangements 93\u003c\/p\u003e \u003cp\u003eInstitutional versus Retail Fees 94\u003c\/p\u003e \u003cp\u003eActive Management 95\u003c\/p\u003e \u003cp\u003eRecord-Keeping Fees 97\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three We Need the Right Sort of Education\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Why the Waste? Because We’re Only Human 101\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOverconfidence in Retirement Planning 101\u003c\/p\u003e \u003cp\u003eBehavioral Finance 102\u003c\/p\u003e \u003cp\u003eLow Participation and Savings Rates 103\u003c\/p\u003e \u003cp\u003ePoor Investment Results 106\u003c\/p\u003e \u003cp\u003eWhat to Do? 108\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Financial Education 109\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFacts that Surprised Us 109\u003c\/p\u003e \u003cp\u003eEnthusiastic Initiatives 110\u003c\/p\u003e \u003cp\u003eWhat Exactly Can Be Taught? 112\u003c\/p\u003e \u003cp\u003eWhy Hasn’t This Already Been Taught? 115\u003c\/p\u003e \u003cp\u003eA Literate Default System 115\u003c\/p\u003e \u003cp\u003eA Final Anecdote 116\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four Other Ways of Running Defined Contribution Plans\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Case Study—Australia 119\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSome Features of the Australian Defined Contribution System 120\u003c\/p\u003e \u003cp\u003eConsequences for Coverage 121\u003c\/p\u003e \u003cp\u003eConsequences for Adequacy 122\u003c\/p\u003e \u003cp\u003eConsequences for Employer Attitudes 123\u003c\/p\u003e \u003cp\u003eLessons for the United States 124\u003c\/p\u003e \u003cp\u003eConsequences for Investment Choices 125\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Three Defined Contribution Plan Models 127\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Bank Savings Model 127\u003c\/p\u003e \u003cp\u003eThe Fund Supermarket Model 129\u003c\/p\u003e \u003cp\u003eThe Retirement Income Model 129\u003c\/p\u003e \u003cp\u003eAn Example of a Participant Statement in the Retirement Income Model 130\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Collective Defined Contribution 133\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Principles 133\u003c\/p\u003e \u003cp\u003eBroader Applications by the Dutch and Canadians 135\u003c\/p\u003e \u003cp\u003eThere’s More than One Way to Skin a Cat 137\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Five The Perspective of the Individual in Decumulation\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 The First Dial: Your Personal Spending Policy 141\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStep One: How to Keep Score—The Current Position 142\u003c\/p\u003e \u003cp\u003eStep Two: What about the Future? 144\u003c\/p\u003e \u003cp\u003eStep Three: The Projected Outflow—The First Attempt to Quantify Your Spending Plan 145\u003c\/p\u003e \u003cp\u003eStep Four: How Long Will Your Assets Sustain Your Spending Plan? 147\u003c\/p\u003e \u003cp\u003eCheckpoint: Is There a Gap to Be Bridged? 148\u003c\/p\u003e \u003cp\u003eNext Up 150\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 The Second Dial: Your Longevity Protection Policy 151\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHow an Immediate Annuity Works 151\u003c\/p\u003e \u003cp\u003eThe Benefit of Buying a Lifetime Annuity 153\u003c\/p\u003e \u003cp\u003eShould Everyone Buy an Immediate Annuity? 154\u003c\/p\u003e \u003cp\u003eReasons Why Some People Don’t Like to Buy Immediate Annuities 156\u003c\/p\u003e \u003cp\u003eFortunately 157\u003c\/p\u003e \u003cp\u003eAppendix: More on Annuity-Equivalent Wealth 157\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 The Third Dial: Investment Policy 159\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eA Reminder of Our Goals and Our Choices 159\u003c\/p\u003e \u003cp\u003eA Framework 160\u003c\/p\u003e \u003cp\u003eTaking Owner-Occupied Real Estate into Account 161\u003c\/p\u003e \u003cp\u003eMany Rules of Thumb Are Just Plain Wrong 163\u003c\/p\u003e \u003cp\u003eFour Wealth Zones 164\u003c\/p\u003e \u003cp\u003eHow Your Wealth Zone Determines Your Choices 166\u003c\/p\u003e \u003cp\u003eBequests 169\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Product Innovation with Decumulation in Mind 173\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eVariations on the Lifetime Annuity 173\u003c\/p\u003e \u003cp\u003eLongevity Protection Plus Long-Term Care Insurance 174\u003c\/p\u003e \u003cp\u003eGuaranteed Minimum Withdrawal Benefits 175\u003c\/p\u003e \u003cp\u003eThe Longevity Pool 177\u003c\/p\u003e \u003cp\u003eAdvanced Life Deferred Annuities 177\u003c\/p\u003e \u003cp\u003ePure Decumulation Products 178\u003c\/p\u003e \u003cp\u003eWhich Type of Product Is Best? 179\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Six The Plan Sponsor’s Role\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Defined Contribution Plan Governance 183\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe Purpose of Defined Contribution Plan Governance 183\u003c\/p\u003e \u003cp\u003eRisk Management 184\u003c\/p\u003e \u003cp\u003eA Defined Contribution Plan’s Purpose and Objectives 185\u003c\/p\u003e \u003cp\u003eFiduciary Duty 186\u003c\/p\u003e \u003cp\u003eWhat Should a Prudent Expert Know—And When? 189\u003c\/p\u003e \u003cp\u003eNew Choices Based on New Knowledge 189\u003c\/p\u003e \u003cp\u003eIn Summary 190\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20 Defined Contribution Plan Effectiveness 191\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eParticipation Rate 193\u003c\/p\u003e \u003cp\u003eParticipation Delay 193\u003c\/p\u003e \u003cp\u003eEmployee Savings Rate 194\u003c\/p\u003e \u003cp\u003eEmployer Contribution Rate 195\u003c\/p\u003e \u003cp\u003eMatch Maximization 195\u003c\/p\u003e \u003cp\u003eParticipant Net Investment Return 196\u003c\/p\u003e \u003cp\u003eHardship Withdrawal Usage 198\u003c\/p\u003e \u003cp\u003eLoans as Distributions 199\u003c\/p\u003e \u003cp\u003eEarly Withdrawals 200\u003c\/p\u003e \u003cp\u003eConclusion 200\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21 The Defined Contribution Plan Sponsor’s Role in Decumulation 201\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eProviding Education 202\u003c\/p\u003e \u003cp\u003eProviding Access to Financial Products: In-Plan or Out-of-Plan 203\u003c\/p\u003e \u003cp\u003eDesign Features 204\u003c\/p\u003e \u003cp\u003eProduct Features 205\u003c\/p\u003e \u003cp\u003eSimplicity 206\u003c\/p\u003e \u003cp\u003eParting Thought 206\u003c\/p\u003e \u003cp\u003eNotes 207\u003c\/p\u003e \u003cp\u003eAbout the Authors 223\u003c\/p\u003e \u003cp\u003eIndex 225\u003c\/p\u003e  \u003cp\u003e\"... the book's positive and inspiring message is one the UK would do well to head.\" (\u003cem\u003ePensions Age,\u003c\/em\u003e September 2009)   \u003cb\u003eDon Ezra\u003c\/b\u003e is a widely published author. He has won a Graham and Dodd Award from the Financial Analysts Journal, the Roger Murray Prize from the Q Group in the United States, and the Lillywhite Award of the Employee Benefit Research Institute \"for extraordinary life contributions to Americans' economic security.\"  \u003c\/p\u003e\u003cp\u003e\u003cb\u003eBob Collie\u003c\/b\u003e has been working with defined benefit and defined contribution plans in the United Kingdom and United States for more than twenty years, playing at different times the role of actuary, investment consultant, and strategist.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eMatthew X. Smith\u003c\/b\u003e has been involved with the design, implemen-tation, administration, consultation to, and asset management of defined contribution plans for over twenty-five years. He has also written and spoken widely on defined contribution topics.\u003c\/p\u003e  The idea of an active retirement as a right has today become a generally accepted idea in the United States and in developed countries around the world. But with more firms switching from defined benefit (DB) pension plans to defined contribution (DC) plans, this has quickly become a more complicated endeavor.  \u003cp\u003e\u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e identifies where the DC system, as it currently operates, is inefficient, and shows how improvements in two area-the accumulation process and the spending phase after retirement-can make it an extremely productive force for generating post-retirement income.\u003c\/p\u003e \u003cp\u003eStarting with the assumption that it is impossible to make the average plan participant an investment expert, the authors suggest a change of emphasis away from investment education and toward better default options. They then detail the inefficiencies that currently exist in the accumulation phase of DC plans, and the opportunities for making this phase more effective. They also tackle the problems of the decumulation phase-outlining the three basic reasons that a retirement account can run out of money-and offer advice on spending policy, longevity protection policy, and investment policy. In addition to this, the authors look at the plan sponsor's role, including the simple but useful steps a plan sponsor can take to help in the post-retirement phase.\u003c\/p\u003e \u003cp\u003eIntroducing a model of retirement savings that allows you to quantify just how much wealth is needed to provide adequate levels of retirement income, \u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e provides a valuable reference that will enhance your understanding of this essential discipline.\u003c\/p\u003e  \u003cb\u003ePraise For \u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e\u003c\/b\u003e  \u003cp\u003e\"Short, clear, complete, and always interesting. Best book on DC plans and what we should do-now.\"\u003cbr\u003e —\u003cb\u003eCharles D. Ellis\u003c\/b\u003e, author, \u003ci\u003eWinning the Loser's Game\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\"At a time when the world is in turmoil, along with retirement expectations, the authors have hit a home run. After reading this book, I have a plan. Read it for your path to retirement security.\"\u003cbr\u003e —\u003cb\u003eDallas Salisbury\u003c\/b\u003e, President and CEO, Employee Benefit Research Institute\u003c\/p\u003e \u003cp\u003e\"\u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e offers a refreshing and provocative perspective on how to assess retirement needs, save to meet these needs, and manage the retirement payout process. In this time of financial turmoil, employees, plan sponsors, and financial advisors will find this highly practical resource volume both useful and humorous.\"\u003cbr\u003e —\u003cb\u003eOlivia S. Mitchell\u003c\/b\u003e, Director, Pension Research Council, Wharton School\u003c\/p\u003e \u003cp\u003e\"\u003ci\u003eThe Retirement Plan Solution\u003c\/i\u003e is a map to the future of 401(k) retirement plans. But it is not just a theoretical view of what could be. Instead, the authors describe the needs and trends that are already here, and then describe the changes that are developing to meet those needs. It is about the tomorrow that is happening today.\"\u003cbr\u003e —\u003cb\u003eFred Reish\u003c\/b\u003e, Managing Director, Reish Luftman Reicher \u0026amp; Cohen\u003c\/p\u003e \u003cp\u003e\"The respected authors have created a readable, timely, and very helpful book on all aspects of retirement planning. The suggestions are practical, the information is concise, and the book is highly recommended for anyone that is interested in sound financial planning.\"\u003cbr\u003e —\u003cb\u003eMoshe A. Milevsky, PhD\u003c\/b\u003e, Finance Professor, York University, Toronto, Canada\u003c\/p\u003e \u003cp\u003e\"This is a must-read for people working in the retirement industry, as well as those who simply care about how to improve their chance of reaching a financially secure retirement. In a clear and simple fashion, the authors deliver one of the best books to date on inefficiencies in the current DC plan and potential improvements.\"\u003cbr\u003e —\u003cb\u003ePeng Chen\u003c\/b\u003e, President, Ibbotson Associates\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990330065125,"sku":"NP9780470398852","price":90.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780470398852.jpg?v=1761787383","url":"https:\/\/k12savings.com\/es\/products\/the-retirement-plan-solution-isbn-9780470398852","provider":"K12savings","version":"1.0","type":"link"}