It’s time for a check-up! Take our financial wellness quiz.

Have you heard the latest buzzword? It’s “financial wellness” — a conceptual cousin of the health wellness programs that are part of many workplace benefits packages. So what’s it all about?

Defining financial wellness.

When it comes to physical health, wellness is pretty easy to understand. Think of it in terms of what it’s not: Health is a state in which sickness is absent. Got any illnesses? No? Then you’re healthy!

Financial wellness can also be seen in terms of what it’s not. Simply put, money shouldn’t cause you stress. But it doesn’t stop there.

True financial wellness means having the freedom to make choices.

On the flip side, being trapped in debt or held back by a lack of savings can limit what you’re able to do in life, and that can cause unwanted stress.

Measuring financial success.

The real measure of success is reaching a state where you’re free of financial burdens, your money is actively working for you, and you’re able to live life on your own terms.

To help keep illness away, health wellness programs offer incentives for hitting certain health targets, such as blood pressure or BMI measurements that fall within a healthy range. But achieving healthy biometrics isn’t the point of the program. The true goal is to encourage habits and choices that lead to a state of ongoing good health, productivity, and optimal performance.

Similarly, a lot of guidelines are out there to help you measure your financial well-being. You can monitor your credit score and account balances; your debt-to-income ratio and percentage of income dedicated to savings; your portfolio performance vs. benchmarks; and your retirement score. Like health measurements, these can help keep a pulse on how you’re doing, but high scores aren’t your end goal. The real measure of success is reaching a state where you’re free of financial burdens, your money is actively working for you, and you’re able to live life on your own terms.

Time for a pop quiz!

Now what?

Remember, there are no passing or failing grades here at Financial Engines! Your results are just a starting point to help you take stock of where you are today — and find opportunities to improve your financial wellness.

Not happy with your score? Talk over your answers with your partner or a financial advisor, and outline a plan for change.

Market Summary: January 2018

Stocks maintained their stride in January, despite late-month volatility.

January saw continued strong performance in the U.S. economy, which helped propel domestic stocks to new record heights. As the month drew to a close, the streak of historically low market volatility came to an end and stock markets dipped, giving us a taste of what lay ahead in early February.

Table of Index Returns as of 1/31/18

What happened.

2017 was a remarkable year for stocks, both at home and abroad. The first month of 2018 kept the run going with increases across all major classes of stocks. Emerging-market international stocks was the top performing asset class in 2017. It started the year on top as well, with January’s highest return of +8.33% (MSCI Emerging Markets Index). Developed markets saw a more modest, but still impressive, return of +5.02% (MSCI EAFE Index). Domestic stocks performed very well too. Large caps, which we generally weight most heavily in portfolios, rose +5.73% (S&P 500 Index). Mid- and small-cap stocks lagged a bit with returns of +2.87% and +2.53% respectively (S&P 400 and 600 indices). A burst of volatility late in January gave us two days on which the S&P 500 saw returns of +/- 1% — one positive, one negative. Bonds were down for the month as interest rates rose, with the Bloomberg Barclays Aggregate Index off -1.15%.

Sidebar text investing in stocksWhy it happened.

Strong initial first-quarter corporate earnings reports helped propel domestic stocks. Continued strong performance in the U.S. economy — both in economic growth and unemployment — contributed to stock performance as well. Longer-term interest rates saw a sharp increase in January. The yield on 10-year government bonds rose from 2.40% to 2.72%. Short-term rates moved up, too, but much less. As expected, the Federal Reserve left interest rates unchanged this month, but markets see an increase in those rates as likely — possibly as soon as March. Bond funds often have exposure to a mixture of both short- and long-term bonds, so they tend to decline when rates rise. Although the brief government shutdown grabbed lots of headlines, it didn’t upset markets.

The late-month announcement that Amazon, Berkshire Hathaway, and JPMorgan were forming a healthcare company sent ripples through the industry. Their partnership aims to reduce healthcare costs for their U.S. employees. Healthcare stocks had slightly outperformed the broader S&P 500 in January up to that point, but the prospect of a new type of competition hit the stocks of health insurers. The entire stock market felt the effects, with the S&P 500 dropping slightly more than -1% over two days. However, healthcare stocks (including drug companies, although they were less affected than health insurers) fell about -3.5%. This event — which was unexpected and hit one particular sector much harder than others — illustrates why diversification across sectors is important. Diversification’s even more important when you hold individual stocks, as you’ll see in this month’s sidebar.

Continued positive economic news in most parts of the world boosted international stocks. Another sharp fall in the U.S. dollar helped domestic investors as well. In 2017, the dollar fell around -10%. In January, it fell another -3% amid some confusion about the current administration’s stance on the dollar. Higher commodities prices helped emerging markets, whose economies are often dominated by the production of raw materials.

How it affects you.

Your portfolio will probably have seen an increase in January. The more investment risk you’re taking — either because you’re further from retirement or you’ve told us you’d like to take on more risk — the better you’ll likely have done. That’s because we’ll have allocated more of your portfolio to stocks. The less risk you’re taking, the less you’ll likely have benefited from last month’s rise in stocks. Also, the fall in bond prices will have had a greater effect on your portfolio.

Asset allocation charts, January 2018

The volatility that began at the end of January is a good reminder that markets are unpredictable, especially in the short term. The best way to increase the likelihood of meeting your long-term goals is to have a well-diversified portfolio. This portfolio should have a level of risk appropriate for your goals and that makes you comfortable.

At Financial Engines, we build your individual portfolio to meet your unique situation. That’s why the more you tell us about yourself and your goals, the better we can tailor your portfolio to you. Talk to one of our advisors if you have questions about your portfolio or if recent volatility has you concerned. And please let us know about any changes to your personal situation. We’re here to help.

Insights into recent market volatility.

Photograph of Chris Bouffard, CFA, Managing Director, Research Center, Financial Engines
Chris Bouffard, CFA, Managing Director, Research Center

We all knew market volatility would pick back up again and stock prices would dip eventually. It was inevitable after such an unusual stretch of one market high after another with record-low volatility. But why now?

  • Inflation and interest rates: Accelerating global economic growth is causing investors to revise their expectations higher for inflation, which in turn is pressuring interest rates higher.
  • Computer-driven volatility strategies: The rise in interest-rate expectations, and the market reaction adjusting to them, spilled over into a complex, risky investing strategy conducted by others. That strategy caused program-driven trading in volatility derivatives, which then spiked market volatility.

It’s been a long time since we’ve seen volatility like this, so as you listen to the news, please keep these things in mind:

We’ve seen this before. A lot.

When you look past the anomaly of 2017, market drops aren’t unusual. Take the S&P 500 index (and its predecessor) going back to 1928.1 On average, you’ll see the stock market drops -5% five times per year, -10% twice a year, and -15% once a year. Yet, it’s been a while — through the end of January 2018, it had been 19 months since a -5% drop and 15 months since slipping -3%.

We’ve got your back.

We stay on top of short-term events but we don’t overreact to them. Instead, both diversification and an appropriate level of risk are core to our philosophy. After all, investing is for the long term, and we’re here to help make sure your portfolio can withstand the inevitable market downs it will see. Along those lines, we adjusted many client portfolios back in August and again last month to reduce risk in those that had strayed too far from target.

We’re here to help.

If you have questions or concerns, please reach out to your advisor. We can help you make sense of it all.

[1] Source: S&P Dow Jones Indices LLC.
CPY 20844

Will the new tax bill affect you?

Neil Gilfedder, CFA
Neil Gilfedder, CFA,
Vice President,
Portfolio Management

2017 was an excellent year for stock markets and a healthy year for economies around the world. Rarely have global stock markets seen such broad-based positive returns with so little volatility, and the gains continued into the beginning of 2018.

The Tax Cut and Jobs Act, signed into law late last month, makes many changes to the tax code. You’ll probably be affected financially by it in some way at some point. At more than 500 pages, however, the legislation is anything but a quick or easy read. That’s why we’re giving you a simple overview of some of the bill’s major points that may affect you.

  • Most of the seven marginal income tax brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) have been replaced by corresponding lower rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%).
  • The child tax credit has been doubled and the income level at which the credit begins to phase out has been significantly increased. Also, a new $500 nonrefundable credit is available for qualifying dependents who are not qualifying children under age 17.
  • Existing “kiddie tax” provisions are replaced by taxing a child’s unearned income using the estate and trust rates (instead of the parents’ tax rate).
  • Existing standard deduction amounts have been roughly doubled, which generally means fewer taxpayers will benefit from itemizing deductions in the future.
  • Individuals can now only itemize deductions of up to $10,000 ($5,000 if married filing a separate return) for state and local property taxes and state and local income taxes.
  • The individual deduction limit on home mortgage interest has been lowered to $750,000 ($375,000 for married individuals filing separately) of qualifying new mortgage debt.
  • Roth conversions can no longer be reversed by recharacterizing the conversion as a traditional IRA contribution by the return due date.
  • New marginal income tax brackets have been set for estates and trusts.
  • The estate and gift tax exemption amount has been doubled for 2018.

The new tax code gives you more to think about for 2018 on top of the usual concerns. Are you saving enough for your future? Can you save a bit more? Are you taking the right amount of risk — so if there is a market drop, you’ll be comfortable with how your portfolio behaves? That’s why now is a great time to review your retirement plan, including your saving and investing strategy.  We can help.

As we look forward to what lies ahead in the coming months, we should keep in mind that not all years will be as positive as 2017. Nobody knows how the markets will do in 2018. As in 2017, they face a mixture of headwinds and tailwinds from factors like a global economy that has been showing healthy performance and the continuing presence of geopolitical risks. What you can control is how you are set to deal with this uncertainty: Your real focus should continue to be on your long-term financial plan.

American employees: Are you leaving money on the table?

If your boss wanted to give you a $1,300 bonus on the spot, you’d take it, right?

A surprising number of Americans actually don’t. Many employees are offered that incentive in the form of a 401(k) match and for whatever reason, end up turning it down. Our research report estimates that Americans are likely to leave a total of $24 billion in unclaimed 401(k) company matches on the table each year.

We arrived at this startling number by looking at the saving records of 4.4 million retirement plan participants at 553 companies. We found that one in four employees (25%) miss out on receiving their full company 401(k) match by not saving enough on their own. The typical employee who fails to receive the full match leaves $1,336 of potential “money” on the table each year. For the average employee, that’s an extra 2.4% of missed annual income. (See infographic for more.)

With compounding, this could amount to as much as $42,855 over 20 years!

Why do so many employees miss out on potentially receiving thousands of dollars every year?

Employees tend to save more for retirement as they age and earn more money. For example, 42% of plan participants earning less than $40,000 per year don’t take full advantage of their employer match. That compares to just 10% of employees who earn more than $100,000 annually. Likewise, employees under age 30 are approximately twice as likely to miss out on their employer match compared to employees over the age of 60 (30% vs. 16%).

For many employees, middle age poses additional savings challenges. We found that the steady decline in employees missing out on their match is interrupted between ages 35 and 45, when the rate of decline flattens out. While we didn’t specifically look at why this savings dip occurs, it may have to do with the growing costs of raising a family, saving to send kids to college, or buying a home.

Advisory services provide a helpful nudge.

Our report showed that employees across all ages and income levels who used advisory services were less likely to miss out on any of their employer match compared to those not receiving this help. For example, 25% of employees who earn less than $40,000 and who use professional advisory services missed out on part of their employer match, compared to 44% of people who didn’t use advisory services.

What can you do to make sure you’re not missing out?

Know your plan.

Find out how much your employer will match your 401(k) contributions and strive to save at least enough to get the full match.

Get professional help.

If you have access to professional investment help (including online advice or managed accounts), take advantage of that benefit.

Ask a financial advisor.

Talk with a financial advisor who has a legal commitment as a fiduciary to put their clients’ interests ahead of their own.

Commit to save more when you can.

If you can’t afford to save enough to get the full match today, increase your savings rate when you get your next raise — and each raise thereafter — until you reach your 401(k) contribution limit.

Remember, the 401(k) match is one of the best deals going for employees, providing an immediate 100% return per dollar invested. So, making sure you get the full match is a key way to improve your retirement security. While many people might feel like they can’t afford to save more, we hope that these numbers help them realize that they can’t afford not to.


Financial Engines Market Update, Q4 2017: Ending on a High Note

Global equity markets ended 2017 on a high note. Economic growth was steady across nearly all major developed economies, employment numbers remained strong, and inflation remains low. Despite political uncertainty and diplomatic tensions, equity markets had a great year. Large-cap stocks in the S&P 500 index gained another +6.6% in the fourth quarter to end the year up +21.8%. Stocks of smaller companies, represented by the S&P SmallCap 600 index, also did well. They gained +4.0% in the fourth quarter and +13.2% for the year.

International stock markets managed to keep up with the strong domestic-market performance in 2017. The MSCI Europe, Australasia, and Far East (EAFE) index gained +4.2% for the fourth quarter, finishing up +25.0% for the year. Emerging-market equities did even better, gaining an impressive +37.3% in 2017.

Bonds were modestly positive, with the Barclays U.S. Aggregate Bond index gaining +0.4% in the fourth quarter. As economic conditions continue to improve, short-term rates have risen, while long-term rates have remained low. Inflation is still muted in the United States, which is helping keep rates down.

The Financial Engines perspective.

The year 2017 ended on positive note as global growth continues to improve. Market volatility has remained unusually low in recent months. But this does not mean that risk is absent. Sudden political events or economic turmoil could change market sentiment quickly. It is important to remain diversified to help weather potential storms and reach your long-term goals. At Financial Engines, we continue to monitor market conditions to keep your portfolio allocation on track.

Have questions?

Financial Engines advisors are here to help.

© 2018 Financial Engines. All rights reserved. This publication is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. Future market movements may differ significantly from the expectations expressed herein, and past performance is no guarantee of future results. Financial Engines assumes no liability in connection with the use of the information and makes no warranties as to accuracy or completeness. Future results are not guaranteed by any party. Financial Engines® is a trademark of Financial Engines, Inc. All other intellectual property belongs to their respective owners. Index data is derived from information provided by Standard and Poor’s, Barclays Indices, and MSCI. The S&P 500 index and the S&P SmallCap 600 Index are proprietary to and are calculated, distributed and marketed by S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC), its affiliates and/or its licensors and has been licensed for use. S&P®, S&P 500® and S&P SmallCap 600®, among other famous marks, are registered trademarks of Standard & Poor’s Financial Services LLC, and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC.© 2016 S&P Dow Jones Indices LLC, its affiliates and/or its licensors. All rights reserved. Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages.

2017 in the markets: Stocks soar while volatility slumbers.

Wall Street financial market capitalization sign with American flags
Neil Gilfedder, CFA
Neil Gilfedder, CFA
 Vice President, Portfolio Management

2017 was an eventful year. The global economy grew healthily; the Federal Reserve (Fed) slowly started to increase interest rates; a major tax bill was signed into law; tensions with North Korea escalated; the Brexit negotiations got underway; and the populist wave in Europe appeared to have slowed with Emmanuel Macron’s election in France. All that may leave you with some questions: What happened in stock and bond markets in 2017, and how did we manage your retirement savings? And how are we going to continue to help you in 2018 on your journey to a more secure retirement?

Looking back.

The U.S. economy continued its long post-Financial Crisis expansion. Unemployment remained low, and economic growth was solid. Companies posted strong earnings, led by the technology sector. Late in the year, a major tax law lowered the corporate-tax rate, meaning that companies will get to keep more of their earnings starting this year.

Yet it wasn’t all smooth sailing, especially on the political front. Tensions with North Korea escalated over the year; a special counsel was appointed to investigate possible Russian interference in the 2016 election; health reform efforts foundered; and there were several devastating hurricanes and wildfires.  Even so, U.S. stocks had a remarkable year. The Standard & Poor’s 500, an index of large-cap stocks, rose every month. By the end of the year, it was up by +21.83%.

International stocks fared better still. Developed-market stocks, measured by the MSCI EAFE Index, rose by +25.03%, and emerging-market stocks (MSCI Emerging Markets Index) grew by a whopping +37.28%. A roughly -10% fall in the value of the dollar helped returns to U.S. investors of international stocks, meaning that returns in foreign currencies were magnified when converted into dollars. But other factors were also at play. Growth in the eurozone surpassed forecasts going into the year. While the Brexit negotiations may have dented U.K. economic growth, its effects were isolated. Macron’s victory in the French presidential elections suggested that the populist tide in Europe may have receded for now. Shinzo Abe’s re-election meant that “Abenomics,” credited with boosting the Japanese economy, would continue. Emerging markets seem to have shrugged off the concerns raised immediately following the U.S. presidential election about our domestic trade policy.

Perhaps as remarkable as the stock-market returns over the year was how little volatility accompanied them. A simple measure of stock-market volatility is the number of days that the S&P 500 moved by more than +/- 1%. In 2017, there were only eight such days — very low by historical standards. In contrast, there were 48 in 2016.

Bonds had a much more subdued year. The Fed started to cautiously bring interest rates back toward historical levels, raising rates three times. Short-term rates, which the Fed has a strong influence over, rose in response. The three-month Treasury bond rate rose from 0.53% to 1.39% over the year. Long-term rates fell slightly, affected less by the Fed than by expectations of inflation and growth, with the 10-year rate falling from 2.45% to 2.40%. Most bond funds hold bonds that span a range of maturities. The Bloomberg Barclays Aggregate Index, a broad bond index, rose by +3.54% for the year.

How we managed your portfolio in 2017.

Our Portfolio Management team watches the markets and your investment options. We review your portfolio each month to ensure it’s still appropriate. If the markets or your investment options change significantly, or if your situation or appetite for risk is different, we’ll buy and sell among the funds your employer offers to adjust your portfolio to where it needs to be.

In hindsight, we can see that the best-performing asset class in 2017 was emerging-market stocks, with an impressive return of +37.28%. Of course, as investors, we don’t have the benefit of hindsight in deciding where to invest for the future. The better approach is to ask, “Given what we know at any moment, what’s the best portfolio allocation to reach long-term growth for your situation and your preferences for risk?” After all, market sentiment can shift dramatically and unexpectedly.

Instead of trying to time market events, we take a disciplined approach to managing your investments. We build personalized and diversified portfolios appropriate for your goals and risk tolerance. This is because different asset classes do well at different times. For example, developed-market international stocks outperformed domestic large caps in the first three quarters of the year, but underperformed them in the final quarter. And asset classes can perform poorly for extended periods of time — sometimes for several years — before performing strongly. We’ve seen this with international developed-market stocks, last year’s laggard and a leader this year. Having exposure to a broad set of asset classes means you’ll never do as well as the best-performing asset class. For instance, emerging-market stocks likely performed better than your overall portfolio during the year. But you’ll always do better than the worst-performing asset class. For 2017, that was short-term bonds. By balancing your exposure to different asset classes, we can gain higher expected returns while taking a reasonable amount of risk over the long run.

Looking forward.

The same investing principle holds true for 2018. We begin a year that has considerable economic and political uncertainty. Will geopolitical tensions escalate? Will a continued partisanship in Washington lead to a government shutdown? Will strong global economic growth continue? As such, it’s still important to have a portfolio without excessive exposure to any particular asset class and its associated risks.

Remember, too, that risk can be positive as well as negative for markets. Despite pessimistic predictions for markets following Brexit and the election of President Trump, stock markets around the world soared in 2017. Had you sat on the sidelines, you’d have lost out on a great year in the markets. Also, keep in mind that stock prices respond to how events turn out compared to what’s expected. In 2017, European stocks fared very well in part because economic growth beat modest expectations. Some of the biggest positive stock-market moves happen in times of economic stress. That’s because what happens doesn’t always meet the dire forecasts.

Building a diversified portfolio that’s right for your preferences and financial circumstances can be a complex task. The more you tell us about your goals, other assets, and preferences, the better we can tailor an investment strategy to meet your needs. If you have questions about your portfolio, feel free to call one of our advisors to learn more. May your 2018 be a prosperous and happy year for you and your family.

Will the new tax bill affect you?

Chris Bouffard
Chris Bouffard, CFA®, Managing Director, Research Center

2017 was an excellent year for capital markets and economies. Rarely have financial markets seen such broad-based positive returns with so little volatility and downside. Momentum carried into 2018 with President Trump’s signature on a sweeping $1.5 trillion tax-cut package. This new law fundamentally changes the individual- and corporate-tax landscape.

The Tax Cut and Jobs Act is a big deal. You’ll probably be affected financially by it in some way at some point. At more than 500 pages, however, the legislation is anything but a quick or easy read. That’s why we’re giving you a simple overview of some of the bill’s major points that may affect you.

  • Most of the seven marginal income tax brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) have been replaced by corresponding lower rates (10%, 12%, 22%, 24%, 32%, 35%, and 37%).
  • Existing standard deduction amounts have been roughly doubled, which generally means fewer taxpayers will itemize deductions going forward.
  • New marginal income tax brackets have been set for estates and trusts.
  • The estate and gift tax exemption amount has been doubled for 2018.
  • Existing “kiddie tax” provisions are replaced by taxing a child’s unearned income using the estate and trust rates (instead of the parents’ tax rate).
  • The child tax credit has been doubled and the income level at which the credit begins to phase out has been significantly increased. Also, a new $500 nonrefundable credit is available for qualifying dependents who are not qualifying children under age 17.
  • Roth conversions can no longer be reversed by recharacterizing the conversion as a traditional IRA contribution by the return due date.

The new tax code gives you more to think about for 2018 on top of the usual concerns. Are you saving enough for your future? Can you save a bit more? Are your investments diversified enough to weather a sudden market drop?

That’s why now is a great time for a quick review of your financial plan — including your saving and investing strategy — with your advisor. We strongly encourage you to reach out to him or her to set up some time to talk.

As we look forward to what lies ahead in the coming months, we need to remind ourselves that it will be hard to match the extraordinarily favorable results of 2017. Like last year, 2018 will face many headwinds. So even against a global economic backdrop that remains healthy and expansionary, it will be important to maintain patience and perspective in 2018. Your real focus should continue to be on your long-term financial plan.


Employer match means more money for you.

Piece of pie

Let’s say you’re walking down the street and see a couple of hundred dollar bills blowing down the sidewalk. Would you pick them up? What if it was a thousand dollars? It seems obvious to take money that’s up for grabs. Unfortunately, the average employee is leaving $1,336 of “free money” on the table each year.1 How? By not saving enough in their 401(k) to get the full employer match.  A 401(k) with employer match is a valuable employee benefit. But how does it work exactly?

401(k) basics.

Let’s start with why a 401(k) itself is so valuable. It offers some key advantages:

  • Tax benefits. Tax advantages of a traditional pre-tax 401(k) work two ways. First, the amount you contribute isn’t taxed when you put it into the plan. This reduces your taxable income, and therefore the amount of taxes you pay in the present. Second, your contribution also gets to grow on a tax-deferred basis in the meantime.
  • Compound growth. Compounding is what helps your money grow over time. As your money grows and your earnings then get reinvested in your account, you have a bigger pool of money that can make earnings going forward. So basically, your earnings are making earnings.
    • Let’s assume that your 401(k) averages 8% a year in earnings and you have $1,000 in your account in year one. You’ll start off year two with $1,080, which in turn grows by 8%. This puts you at $1,166 to start year three. This rate of growth would continue each year as long as earnings stay steady.

The matching contribution.

A matching contribution is what it sounds like: It’s when your employer matches your own 401(k) contributions with company money. If your employer offers a match, they’ll typically match up to a certain percent of the amount you put in.

Let’s say that your employer matches your contributions to the plan, dollar for dollar, up to 3% of your salary. If you contribute 2% of your salary to your plan, your total 401(k) contribution will be 4% of your salary each month after the employer match is added. If you bump up your contribution by just 1% (so you’re putting in 3% of your salary), your total contribution is now 6% with the employer match.

If that sounds like a good deal, that’s because it is. The employer match is one of the main reasons a 401(k) is valuable for employees. Where else can you get an immediate return on your investment?

Piece of pie

Unfortunately, many workers don’t take full advantage of the employer match because they’re not putting in enough themselves.


The picture to the right shows how an employer match could help fill out your annual retirement savings.

Why it matters.

A recent survey noted that “for three-quarters of employers, a defined contribution plan (like a 401(k)) is the primary source of retirement income for their employees.”2 How much you save, the match you get, and the performance of your investment choices can have a huge impact on what that life in retirement will look like. So don’t miss the low-hanging fruit that is the employer match — put enough of your paycheck into your 401(k) each month to get the maximum contribution from the company you work for. Your future retired self will thank you.


1 May 2015. Missing out: How much employer 401(k) matching contributions do employees leave on the table? Financial Engines. Retrieved November 15, 2017, from
2 2013 Trends & Experience in Defined Contribution Plans. Aon Hewitt. Retrieved December 13, 2017, from

Market Summary: November 2017

Expectations of corporate-tax cuts propel U.S. stocks.

U.S. stocks performed strongly in November. Small- and mid-cap stocks surged in the second half of the month, reversing losses early in November. They closed up +3.52% and +3.68% respectively (S&P 600 and 400 indices). Large caps followed, closing up +3.07% (S&P 500 index) and finishing with positive returns for the 13th month in a row. International stocks also had a positive month, but their returns were more modest than those of U.S. stocks. Year to date, international stocks are still outperforming U.S. stocks.Developed-market and emerging-market stocks rose by +1.05% and +0.20% (MSCI EAFE and Emerging Markets indices) respectively. Interest rates ended November up for the month. This led bonds to close down, with the Bloomberg Barclays Aggregate index returning -0.13%.

Overall, it was yet another period of low volatility in stock markets, with the S&P 500 not moving more than +/-1% on any day in November. Markets that tend to be more volatile were, true to form, more volatile in November. Small-cap U.S. stocks had four days of +/- 1% moves, and emerging-market stocks had three.