What the experts say
401(k)s that move with your job
“It could soon get easier to move a 401(k) retirement account from one job to the next,” said Bailey McCann in The Wall Street Journal. A new Labor Department proposal would allow for better “portability” of accounts. Employees often can’t redirect or opt out of their old accounts without paying significant income taxes, early-withdrawal penalties, or rollover fees. Many young workers, who frequently change jobs, abandon accounts because “they don’t consider the amount worth the trouble of dealing with it,” and end up “restarting their retirement savings from zero several times.” The new proposal would allow departing employees to automatically move 401(k) money into a tax-favored IRA, with no fees, and then automatically transfer it into a 401(k) at their next job.
Seniors battered by reverse mortgages
Thousands of homeowners “continue to suffer from reverse mortgage loans written a decade ago,” said Nick Penzenstadler and Jeff Kelly Lowenstein in USA Today. Opportunistic lenders persuaded senior citizens to borrow money against the market value of their home, “blitzing daytime television with trusted celebrity pitchmen.” Some 100,00 loans wound up in default, with lenders often moving swiftly to seize houses if the borrowers “missed a paperwork deadline or fell behind on taxes or insurance.” In some cases, homeowners were asked to take their name off their deed and then lost their home after their spouse died. African-Americans were most likely to be victimized; residents of majority-black areas were six times as likely to have a reverse mortgage end in foreclosure than borrowers in mainly white neighborhoods.
The reverse reference check
Too many hiring managers lie to job candidates about what a job demands, said Atta Tarki and Jeff Weiss in Harvard Business Review. It used to be easy to make a job sound better than it was. No longer. “In the era of Glassdoor and LinkedIn, savvy candidates will research the good, bad, and ugly about your company before interviewing.” Lying results in hires who are likely to be disappointed with the job and leave. To avoid that, one senior film executive, Vincent Szwajkowski, asks candidates “if they would like to conduct reverse reference checks on him.” If they accept, he gives the names of two people who worked for him—usually including one person who did not work out.