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Retirement Planning > Social Security


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Lipper, Inc., has joined forces with The McHenry Group to launch a retirement planning tool called Lipper Retirement Solutions that will allow financial institutions and advisors to create customized Investment Policy Statements (IPS) for their retirement plan clients. Lipper’s tool will also help advisors analyze, compare, and report on their clients’ retirement plan investments centered around customizable IPS standards and criteria, the two companies said in a release announcing the partnership. Lipper will also provide content for integration into McHenry Group’s PlanTools Risk Management System, which the consulting firm designed to help advisors and institutions “better and more efficiently serve the needs of fiduciary investors such as retirement plan sponsors and trustees,” according to the release. Advisors and institutional service reps can use Lipper data and content to help clients select appropriate mutual funds based on their risk tolerances and preferences. “Lipper is the leader in services to mutual fund boards and other fiduciaries,” said Ward Harris, founder and CEO of The McHenry Group. Lipper “is the largest provider of support for regulatory review of mutual fund fees under Section 15(c) of the Investment Company Act of 1940, as well as being a premier provider of data and analytic tools for assets managers and product developers in the fund industry.”

Federal Reserve Board Chairman Ben Bernanke told the Washington Economic Club in early October that retiring baby boomers will put a strain on the nation’s budget and economy, and that the best remedy is to revamp Social Security and Medicare. “Reform of our unsustainable entitlement programs” should be a priority, Bernanke said in his speech, titled “The Coming Demographic Transition: Will We Treat Future Generations Fairly” (A full transcript of the speech is available here). The coming demographic transition, according to Bernanke, “will have a major impact on the federal budget, beginning not so very far in the future and continuing for many decades.” While the demographic change will affect many aspects of the government’s budget, he argued that “the most dramatic effects will be seen in the Social Security and Medicare programs, which provide income support and medical care for retirees and which have until now been funded largely on a pay-as-you-go basis.” Under current law, Bernanke noted, spending on these two programs alone will increase from about 7% of the U.S. gross domestic product (GDP) today to almost 13% of GDP by 2030 and to more than 15% of the nation’s output by 2050. “The outlook for Medicare is particularly sobering because it reflects not only an increasing number of retirees but also the expectation that Medicare expenditures per beneficiary will continue to rise faster than per capita GDP.” By way of example, Bernanke pointed out that the Medicare trustees’ intermediate projections have Medicare spending growing from about 3% of GDP today to about 9% in 2050–a larger share of national output than is currently devoted to Social Security and Medicare together. As the population ages, he concluded in his remarks, “the nation will have to choose among higher taxes, less non-entitlement spending, a reduction in outlays for entitlement programs, a sharply higher budget deficit, or some combination thereof.”

Senator Gordon Smith (R-Oregon) introduced The Women’s Retirement Security Act of 2006 (S. 3951) in late September. The bill is designed to help women save more by amending the IRS Code of 1986 and ERISA. Co-sponsors of the bill are Kent Conrad (D-North Dakota), John Kerry (D-Massachusetts) and Jeff Bingaman (D-New Mexico).

A new report by the U.K.-based market research firm Datamonitor–”US High Net Worths 2006″–says that the U.S. currently has about 14 million high-net-worth individuals and that their number will grow to 20 million by 2010. Over that same period, liquid assets held by this group will jump by 37%, from $14 billion to $19.2 billion, according to Matt Kendall, a Datamonitor financial services analyst.


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