Planning for retirement is a crucial aspect of financial well-being. However, there are several financial landmines that individuals must navigate to ensure a secure and comfortable retirement.
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Increased politicization of “environmental, social and governance” (ESG) factors in investment has resulted in one side claiming it only promotes social and political objectives, and the other side claiming that ESG is always relevant to making sound investment decisions.
President Biden’s veto of a Congressional resolution, regarding recently finalized amendments to a 2020 Department of Labor (DOL) administrative rule on retirement security, has brought ESG to the forefront again. The DOL’s amendments address how fiduciaries of a person’s 401(k)s and private pension funds make decisions about their retirement savings and the role of ESG in making those investment decisions. The DOL, under ERISA (Employee Retirement Income Security Act of 1974), regulates private retirement plans. ERISA covers roughly $12 trillion in retirement savings for 150 million Americans.
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A record-setting number of Americans are pulling money from their 401(k) plans to cover emergency expenses, The Wall Street Journal reported Thursday, citing data from major investment manager, Vanguard Group.
The proportion of people who pulled from their 401(k) jumped by about one-third in 2022, to 2.8%, up from 2.1% in 2021 and 2% in the pre-pandemic era, according to the WSJ. Vanguard manages roughly 5 million accounts, so the total number of people making withdrawals climbed from roughly 100,000 to roughly 140,000 in 2022, as people both struggled with financial stress ranging from credit card debt to eviction.
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