In search of the ‘average’ actively managed mutual fund

Part of The Business of Retirement series

Portrait at the 2014 Invesco National Retail Sales Meeting,A common refrain I hear today is that the average actively managed mutual fund cannot outperform the S&P 500 Index, so why would you invest in it? But here’s my problem — I cannot find that so-called “average” active fund. And for good reason … there is no such investment.

Beyond benchmarks

What this sweeping statement fails to take into account is that by speaking in averages, you lose the ability to understand and examine the key components of an actual actively managed fund — not a hypothetical representation. To analyze an active fund, an investor must review the fund’s style, management approach, fees, risk, return, management team tenure and experience, along with myriad other details.


IRS provides relief for certain savers who miss rollover deadline

The new provision can help people who missed the deadline due to error, illness or other reasons

Jon VoglerOn Aug. 24, 2016, the Internal Revenue Service (IRS) provided a self-certification procedure designed to help recipients of retirement plan distributions who inadvertently miss the 60-day time limit for properly rolling these amounts into another retirement plan or IRA.

By law, money received by a taxpayer from a 401(k), IRA or other workplace retirement plan must be contributed (i.e., rolled over) to another retirement account within 60 days to avoid immediate taxation. Otherwise, it is considered a distribution subject to regular taxes and, if the taxpayer is under age 59½, a possible 10% early withdrawal penalty. Prior to the IRS announcement, the only way to get relief from the 60-day rollover requirement was to apply to the IRS for what’s known as a private letter ruling, an expensive remedy (there’s a $10,000 filing fee, not counting the fee paid to an accountant or tax advisor to prepare the ruling request) that takes several months to process.

Who qualifies for the new procedure?


529 college savings plans and financial aid

The ABCs of your EFC

Tom RowleyWith the high cost of college, chances are good that federal financial aid won’t cover all your child’s college expenses, which is why many parents have opened 529 college savings plans to help fund their child’s education.

In fact, one of the biggest questions I receive from parents is, how will a 529 college savings plan account affect need-based student aid?

To answer that question, let’s start with


Annuities: Are you overlooking this retirement income source?

Part of Invesco’s Saving for Life series

Andrew LasterThree-quarters of Americans are worried about having enough money for retirement.1 That’s no surprise, as pensions are rapidly disappearing and Social Security is subject to political tinkering. What’s more surprising, in my view, is that many investors have overlooked annuities as a way to potentially fill the retirement income gap. It’s been estimated that less than 8% of retirees age 70 and older are getting income from a private annuity.2

What is an annuity?


Want financial aid for college? The time to act is now.

What parents need to know about the new FAFSA timeline for student financial aid

Tom Rowley

College is expensive, and getting financial aid that doesn’t have to be paid back is every parent’s dream. To achieve that dream for your child in the 2017-2018 school year, you need to be aware of two significant changes to the FAFSA (Free Application for Federal Student Aid) process. Otherwise, your child could miss an opportunity for federal grants and work-study funds.

The financial aid clock is ticking

The most significant change is that


DOL exempts certain state-run plans from ERISA

State plans for private-sector workers are granted ‘safe harbor’ despite retirement industry concerns

Jon Vogler

On Aug. 25, 2016, the US Department of Labor (DOL) issued final regulations that exempt state-run retirement plans for private-sector employees from the requirements of the Employee Retirement Income Security Act of 1974 (ERISA). While this will allay state fears that the plans would have to be ERISA-compliant, and thus incur additional costs, the retirement industry has reiterated numerous concerns about this development dating back before the release of the similar proposed rules last November. (For background on this issue, see my Nov. 20, 2015, blog post titled DOL riles retirement industry with ERISA exemption for state-run IRAs.)

Requirements for safe harbor status

To date, eight states —