All articles tagged with #retirement funds
Analysts warn that the AI investment bubble, which is currently driving a significant portion of the US economy, could burst and negatively impact retirement funds, especially as public markets are heavily concentrated in tech stocks. A slowdown or collapse in AI spending could lead to a recession in tech and related sectors, with potential repercussions for individual retirement savings.
UnitedHealth Group is facing a class-action lawsuit alleging it improperly used employees' forfeited 401(k) funds to reduce its own costs, violating fiduciary duties under ERISA. The company denies the claims amid multiple legal challenges related to its business practices.
Some retirees have heavily invested in Trump Media stock, despite its volatility and significant losses. One investor, who put 98% of his retirement funds into the stock, remains optimistic due to a supposed 'secret' plan by Trump and the company's CEO. Although the stock saw a temporary surge, it remains unstable, with Trump Media facing financial challenges and declining revenue. The company's future is uncertain, especially as Trump's return to mainstream platforms diminishes the unique appeal of Truth Social.
Nearly 170 former employees of First Republic Bank have filed a lawsuit against the U.S. Federal Deposit Insurance Corporation (FDIC), accusing the regulator of blocking their access to approximately $150 million in retirement funds. The employees allege that the FDIC stopped payments intended for them under a deferred compensation plan and instead treated them as unsecured creditors. The lawsuit is the latest fallout for the FDIC from the bank's failure earlier this year, which cost the agency's deposit insurance fund about $32 billion. The FDIC is also facing litigation from the former parent company of Silicon Valley Bank, seeking the return of about $2 billion seized after the bank's collapse.
Confusion about retirement fund minimum distributions can lead to costly mistakes. Minimum distributions are not required at age 59.5, but rather at age 73 or later, depending on the birth year. If still working, RMDs can be postponed for retirement plans sponsored by the current employer, but they are still required for other retirement accounts. Roth accounts are exempt from RMDs. It is advisable to consult a tax professional to navigate the complexities of tax law and avoid costly missteps.
A man who lost his job and home after using his 401(k) investments to support his family during financial difficulties is wondering if he has a claim to his wife's $200,000 inheritance. In Ohio, where they reside, marital assets are divided fairly but not necessarily equally. Inheritance is considered separate property unless it is commingled with marital assets. The man would likely have had to give up 50% of his property in a divorce, assuming it was purchased during the marriage. It is advised not to use inheritance money for regular spending and to keep it separate to prove its separate nature. The man may also need to consider alimony payments and other legal costs in the divorce.
Long-term care insurance can help cover the expensive costs of long-term care, but it also comes with its own price tag. To make paying for coverage easier, options include utilizing single-premium long-term care insurance by repurposing retirement funds, adding a long-term care rider to a life insurance policy, using healthcare savings accounts (HSAs) to pay premiums, and purchasing a policy early to lock in a more affordable rate. These alternatives can help individuals plan for and manage the financial burden of long-term care.
Former Baltimore state's attorney Marilyn Mosby has been convicted of perjury for lying about the finances of a side business to access retirement funds during the Covid pandemic, using the money to purchase two Florida homes. Mosby gained national attention for prosecuting Baltimore police officers involved in the death of Freddie Gray in 2015. She also faces separate charges of mortgage fraud. Prosecutors argued that Mosby falsely claimed her business was harmed by the pandemic to access the funds, while her defense argued she was entitled to withdraw the money. Mosby's trial was moved from Baltimore to Greenbelt, Maryland, due to concerns of biased media coverage.
Former Baltimore state's attorney Marilyn Mosby has been convicted of two counts of perjury for lying about the finances of a side business to access retirement funds during the pandemic. She used the money to purchase two homes in Florida. Mosby gained national attention for prosecuting Baltimore police officers involved in the death of Freddie Gray in 2015. She also faces separate charges of mortgage fraud. Mosby withdrew $90,000 from Baltimore's deferred compensation plan in 2020, claiming her business was harmed by the pandemic. Prosecutors argued that she was not entitled to the funds and that her business had no clients or revenue. Mosby's lawyers claimed she was legally entitled to the money and that her business was affected by the pandemic.
More Americans are resorting to hardship withdrawals from their 401(k) accounts to cover emergency expenses, such as medical bills or to prevent foreclosure. Reports from Fidelity Investments and Vanguard show a significant increase in hardship withdrawals in recent years. However, financial planners caution against this move as it comes with tax penalties and missed investment growth. The rise in hardship withdrawals is attributed to a combination of factors, including rising prices, high interest rates, and a decrease in savings rates. Experts recommend building emergency savings and exploring alternatives like borrowing against a 401(k) before resorting to hardship withdrawals.
A new Bankrate report reveals that almost 70% of parents with children aged 18 or older have sacrificed their own finances, including draining their retirement funds, to financially support their adult children. This includes paying down debt and saving for emergencies.
Republican-led states are introducing regulations to stop public entities from investing in funds that consider environmental, social, and governance issues (ESG investing), which is increasingly affecting public pensions. However, state and municipal pension funds have shown strong support for ESG investing, backing resolutions in favor of the practice about 90% of the time in 2021. The battle over ESG investing has been bubbling up in Washington, too, with President Joe Biden blocking a bipartisan bill that would have nullified Labor Department rules permitting some retirement plans to consider ESG factors.
House Republicans failed to override President Joe Biden's veto of a resolution that would have prevented retirement fund managers from accounting for certain social factors when making investment decisions. The resolution took on the issue of environmental, social and governance (ESG), which has become a major target by conservatives who say it is unfair to certain companies, including in the oil and gas industry, and can be bad for investors. Biden vetoed the measure on Monday, saying then that the Department of Labor's rule "protects the hard-earned life savings and pensions of tens of millions of workers and retirees across the country."
President Biden vetoed a bill that would end a Labor Department rule allowing retirement fund managers to use ESG metrics when managing funds, prioritizing the liberal agenda over actual returns. The move eviscerates the decades-old rule that retirement funds aim to maximize returns. The Democratic Senate passed a House-approved bill to block it, but Biden claimed that not sinking money into woke companies "would put at risk the retirement savings of individuals across the country."