Influential labor economist Teresa Ghilarducci argues that working longer is not the solution to the retirement crisis. She explains why not and what is.
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TERESA GHILARDUCCI
- Professor of Economics, The New School for Social Research
- Director, Schwartz Center for Economic Policy Analysis (SCEPA)
- Director, The New School’s Retirement Equity Lab (ReLab)
ACTION POINT
CONSIDER A TARGET DATE FUND
- Target Date Funds
- Very popular “all-in-one, set it and forget it” retirement savings vehicles
- $3.5 T of investments
- Target Date Funds – How They Work
- Decide on a year to retire = the “target date”
- Open an account
- Fund will invest in diverse portfolio of mostly stocks & bonds until retirement date
- More stocks in younger years
- More bonds & defensive investments as you near retirement
- Managers do rebalancing along the way
- Target Date Fund Firms
- 80% of funds with biggest firms:
- Vanguard
- Fidelity
- T. Rowe Price
- BlackRock
- American Funds
- 80% of funds with biggest firms:
- Morningstar’s “Gold” Target Date Funds
- American Funds Target Date Retirement
- BlackRock LifePath Index
- Fidelity Freedom Index
- PIMCO RealPath Blend
- T. Rowe Price Retirement
- T. Rowe Price Retirement Blend
BOOKSHELF
ONE INVESTMENT
GHILARDUCCI: DELAY COLLECTING SOCIAL SECURITY
- Wait as long as you can to collect
- Spend 401(k) first
- Can get a higher benefit the longer you wait until age 70
- Social security is indexed to inflation
FROM THE ARCHIVE
Teresa Ghilarducci from the WEALTHTRACK Archives: