Tag Archives: STRIDE
Income-Focused Strategy Indices Show Resilience in 2020 (Part 2)
In part 1 of this blog, we saw how falling real interest rates reduce the retirement income a given account balance can support. In part 2, we focus on how interest rate risk may potentially be managed through an income-focused asset allocation. The S&P STRIDE (S&P Shift to Retirement Income and Decumulation) indices measure the…
- Categories Fixed Income, Strategy, Thematics
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Income-Focused Strategy Indices Show Resilience in 2020 (Part 1)
Retirement investors faced numerous investment headwinds in 2020. In addition to heightened volatility in the stock market, they had to cope with falling interest rates on both regular and inflation-indexed bonds. Real interest rates, interest rates that have been adjusted to remove the effects of inflation, are especially relevant for retirement investors because lower real…
- Categories Fixed Income, Strategy, Thematics
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How Is Your Undefined Benefit Plan Going?
I have probably been receiving them for years, but lately I have noticed opposing position papers in my inbox. Some claim Americans need a revival of defined benefit (DB) plans because of a looming retirement crisis, while others contend that defined contribution (DC) plans are doing great and there is no cause for alarm. DC…
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TIPS Improve Income Stability For Lifestyle Goals
Commodities are a direct way to protect against inflation since they are the natural resources that build society. The same food and energy that is in CPI (Consumer Price Index from the Bureau of Labor Statistics,) is in the commodity indices like the S&P GSCI and DJCI, and more energy has provided more inflation protection since energy is…
- Categories Commodities, Equities, Fixed Income
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Next Generation Retirement Investing
For many plan participants, the goal of a retirement account is to provide a steady stream of income that will sustain their standard of living in retirement. Therefore, participants need a framework that aligns the management of their savings with their retirement income goal. This framework has three related components: Risk management that addresses the…
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Try a TIPS Mixer in Your Equities Cocktail
As product manager of the S&P STRIDE Indices, I sometimes find myself extolling the virtues of Treasury Inflation-Protected Securities (TIPS), which I believe are an underappreciated asset class. When inflation is relatively tame, people often ask why they should think about TIPS. The answer is that TIPS don’t hedge expected inflation—that’s already priced in. TIPS…
- Categories Fixed Income
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- Fixed Income
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Benchmarking Retirement Withdrawal Strategies
Capital market benchmarks are, of course, widely used yardsticks of investment performance. For the production of the S&P STRIDE Index, in addition to providing performance data we also calculate hypothetical retirement income for vintages of the index that are at, or past, their target date. Hypothetical retirement income is expressed in index points, and can…
- Categories Equities
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- Equities
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The Price of Retirement
In my last post, I discussed variability in cost and affordability of retirement income. I used some data from S&P STRIDE, our new benchmark that provides a cradle-to-grave yardstick for wealth accumulation and income generation. This week, I will look a little closer at how we measure retirement income, as well as its present value…
- Categories Equities
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- Equities
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What Is Your Retirement Number?
Wealth drawdowns and volatility of returns are not the only risks facing defined contribution (DC) retirement plan participants. Those relying primarily on 401(k)s and other DC plans for retirement income also need to address longevity, inflation, and variability in the price of income. Furthermore, many traditional guidelines for withdrawal policies are simply insufficient for real-life…
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- S&P 500 & DJIA
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Make Room for a New Target Date Category
Defined contribution (DC) plans, such as 401(k)s, place challenging demands on individuals, the highlights of which are to save diligently (which implies having adequate income, as well as budgeting abilities), to rationally select from among numerous investment vehicles, and to judiciously transition from wealth accumulation to income generation as retirement approaches. Innovations in plan design,…
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