Anne Tergesen

speaker

4,485 appearances 83 recordings 1 series first heard Jul 2017 last heard Feb 2025

Anne Tergesen’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · 401(k) Plans Offering Pension-Like Benefits to Ensure Steady Payments · 21 Jun 2022 podcast

I think a lot of companies feel that when people get to retirement, it's almost like a paternalistic thing. matched

They want to help them maximize their retirement income. matched

And I think there's some concern that if retirees just take their money and they roll it over into an IRA and they try to manage it themselves, they might not come up with an optimal solution on their own because this is kind of a complicated problem to solve. matched

Companies also want to retain retirees in their 401k plans because retirees usually have the biggest balances. matched

And so increasingly you're seeing because of the baby boomers retiring that companies are really trying to convince them to keep their money in the plan because the more money that's in a company's 401k, the more leverage the company has. matched

to bargain with financial services companies that provide, you know, the investments. matched

They bargain and they ask for reductions in fees. matched

And that's a good thing for the plan because the lower the fees go, then the more of the investment returns the employees get to keep. matched

Thanks for having me. matched

WSJ Your Money Briefing · Why Your 401(k) May Be Riskier Than You Realize · 25 May 2022 podcast

So, for example, for the youngest workers, on average, target date funds now invest about 92 percent of their contributions in stocks. matched

And that's up from 85 percent a decade ago. matched

Thanks for having me.

A target date fund is a fund, usually a mutual fund, that contains stocks and bonds. matched

And it shifts from sort of an aggressive allocation, which may be as much as 90% in stocks for young investors, people who are just starting out their working careers. matched

And then it shifts over time to be composed of a greater proportion of bonds as people age. matched

So the idea is that you get an all-in-one fund with both stocks and bonds and that it shifts the allocation between stocks and bonds to become more conservative over time as people approach retirement age. matched

Target date funds are the most popular type of investment within 401 plans. matched

And target date funds these days attract about 60% of the contributions to 401 accounts. matched

So essentially with a target date fund, what you're doing is you're outsourcing the management of your 401 to the experts who run these funds, who give thought to what the asset allocation should be for people your age. matched

That doesn't mean you have to accept it. matched

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