March 30, 2020

Bucks Blog: Pimco, Yoda and Some Big Retirement Savings Questions

The Jedi master Yoda in the 2005 film Star Wars: Episode III Revenge of the Sith.Lucasfilm/20th Century FoxThe Jedi master Yoda in the 2005 film “Star Wars: Episode III Revenge of the Sith.”

In this weekend’s Your Money column, I look at Pimco’s fledgling effort to break into the target-date fund segment of the mutual funds industry, an area dominated by Vanguard, Fidelity and T. Rowe Price, which sell these funds to administrators of 401(k) and similar workplace retirement plans.

Pimco’s RealRetirement funds are a different breed. Its managers are skeptical about stocks, so they don’t put as much money in them. They buy hedges of various sorts against large losses, which competitors mostly don’t do. And they have leeway to adjust the allocation of the assets a fair bit depending on market conditions.

Oh, and Pimco thinks you ought to be saving 20 percent of your income to give yourself a decent chance at replacing even half of your salary once you retire. (And a happy weekend to you, too!)

As Yoda put it (and as Pimco quotes him), “You must unlearn what you have learned.”

Or must you? Two big questions arise from all of this:

1. Are these folks running a hedge fund disguised as a target-date fund?
2. Who among you is managing to put away 20 percent of your earnings toward retirement savings?

Please discuss amongst yourselves.

Article source: http://feeds.nytimes.com/click.phdo?i=fda7ab4a58a6931ccd97a39302226dfe

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