Defined Contribution

Followers of Ben Graham might have no idea what Im talking about.

President Barack Obama unwrapped a retirement option for workers whose companies dont have a 401(k) plan during his State of the Union Address.

The House Committee on Small Business in the fall held a hearing on the state of retirement savings for small employers, noting administrative complexity and costs could discourage many businesses from offering the benefit.

Shifting rules on fee transparency and the push for the Labor Department to develop a fiduciary standard give RIAs an opportunity in the retirement plan market.

The big upside is that the employer and the employees split the investment risk between them so neither side shoulders all of it.

Assuming that Social Security benefits are not reduced, EBRI found that between 83 and 86 percent of workers with more than 30 years of eligibility in a voluntary enrollment 401(k) plan should have enough to replace at least 60 percent of the wages they were making at age 64.