Rethinking the 401(k)

Rethinking the 401(k): Given the chance to rethink how one’s hard-earned money is saved and invested, how far would we land from the design of the 401K? Apparently pretty far, according to the Wall Street Journal. Jason Zweig explores how new plans could blend “the stable income for life of old-fashioned defined-benefit pension plans with the favorable tax treatment of the contemporary 401(k).” The plan would also follow participants to wherever they went to workunlike now where employers have specific 401(k) plansand be universally available.

Not a bad idea, nor is it impossible to accomplish according to the article. This and more recommendations in the WSJ.

Unicorn 2.0: “Unicorn” startups worth $1 billion like Airbnb, Uber and others got their name and fame largely from the rise of smartphones and inexpensive cloud computing, writes The New York Times. They essentially took existing services we rely upon and upgraded them to easier and more personalized experiences. Now, a second wave of “unicorns” is turning that model on its head and focusing specifically on software for industries like agriculture, banks and life science businesses that need modernization.

Building Bust: After finally recovering from the housing bubble and subsequent crisis in 2008, America is now struggling with the opposite problem: we aren’t building enough new homes, according to Bloomberg Businessweek. The deficit is forcing existing homes to be propped up at levels that exclude many Americans from buying a home and is exacerbated by low unemployment (although there are likely worse problems to have). Compound that with zoning rules that cater to a “not-in-my-backyard” mentality, and voilaa housing shortage is born.

Hurricane Debt Preparedness: We’ve watched the Caribbean be completely devastated by hurricanes like Irma and Mariabut natural disaster destruction takes a toll on more than just the infrastructure, according to an article from the FT. The storms also wreak havoc on the islands’ economy, damaging 2.4 percent of GDP annually. To deal with the effects, countries are now looking to financial instrumentslike limited self-insurance through small fiscal buffers, contingent credit lines and insurance through regional risk pooling mechanismsto meet debt needs and free up scarce resources after the storm.

Tax Season Scaries: We’re now in the midst of tax season and while many of Americans eagerly rush to see their returns, some may be disappointed according to the Washington Post. After the tax code overhaul in 2017, big changes like limits on property and local income tax deductions, and new paycheck withholdings, have resulted in numbers much lower than most are used to seeing.

From the Post: “The average tax refund check is down 8 percent ($170) this year compared to last, the IRS reported Friday, and the number of people receiving a refund so far has dropped by almost a quarter.”

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