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Retirement saving requires key decisions: when to start, how much to save, and where to invest. The investing decision has drawn more attention as government regulators work to open 401(k) plans to alternative assets such as private market investments.Below, we compare the paths of two hypothetical retirement savers and their outcomes. A tale of two retirement savers Laura and JR are two 25-year-olds newly employed at the same company, in the same role. Step 1: Deciding to Save On her first day at work, Laura committed 10% of her $75,000 salary to her 401(k). That earned her company’s 3% annual match (it matches 50% up to 6%), and 13% in total savings. She still had room in her budget for weekends filled with activities.JR was more worried about now. Rather than putting money into a 401(k) he wouldn’t touch for decades, he enjoyed his $75,000 salary. Five years later, JR began to build his nest egg. He opted for the minimum contribution rate to qualify for the company match, contributing 6% with a 3% match. Step 2: How to Invest Laura and JR’s employer offered many investment vehicles, including target-date funds. One invested only in public stocks and bonds; the other kept a 15% allocation to private equity and private credit across the glide path.Laura preferred the public-only target-date fund for its simplicity and transparency. JR was also drawn to the target-date options and their ease of use. However, he went with the private market option since it promised higher returns, and to make up for his late start. He figured he could quickly recover five years of missed contributions, given that he had 35 years until retirement. From earnings years to retirement Laura and JR both rose steadily to senior management positions. Their career progression and their salaries stayed in tandem. By the time they were turning 65 and approaching retirement, each was earning $178,620 a year. There had been no changes to their 401(k) contribution rates or their company’s matching formula. As Laura and JR prepared to retire, they reviewed their 401(k)s.For JR, the target-date fund with private markets had paid off. Over 35 years of investing, the fund delivered an annualized return of 8.9%, compared with 8.4% for the public-only option. This left him with a balance of about $2 million. Combined with Social Security, JR felt that he could enjoy retirement without the risk of outliving his savings.The public-only TDF underperformed compared with the private markets TDF, but Laura didn’t mind. Over 40 years of investing, her 401(k) account balance grew to more than $3 million. By starting earlier and contributing more, she harnessed the power of compounding returns to a much greater extent than JR had.JR’s private markets sleeve gave him a small edge, but Laura’s decision to start saving earlier and save more made the real difference. Compounding did the rest, turning her steady contributions into a balance far larger than JR’s.The bottom line: It is far better to focus on how much to save and when to start saving, instead of the whims of the public and private markets. Behind the curtain In illustrating the importance of saving early and saving more, we had to make several assumptions. We assumed that Laura and JR earn the same salary and stay at the same employer for their entire careers, with no breaks in employment. We assumed stocks, bonds, and private markets all delivered the long-term return expectations set by Morningstar Investment Management. It’s not a given that a target-date fund with a 15% allocation to private markets would outperform a similar strategy focused solely on public stocks and bonds, especially after fees.There is debate about whether private equity funds outperform their public counterparts. A Morningstar analysis concluded that private equity funds are best thought of as another form of active management, where a handful of funds may significantly outperform their peers, but median returns are similar (or worse) to public market funds.Moreover, private markets present additional challenges for forecasting due to the heterogeneity in the underlying investments. The results should be viewed as more of a best-case scenario for target-date funds with private market exposure. This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-finance Jason Kephart, CFA, is a senior principal, multi-asset strategy ratings, for Morningstar.Spencer Look is an associate director, retirement studies for Morningstar Investment Management LLC. Samantha Lamas is a senior behavioral insights researcher for Morningstar. Jason Kephart, Spencer Look, and Samantha Lamas of Morningstar
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E-Commerce
After enough Democrats caved this week and agreed to fund the federal government without guarantees for extending healthcare subsidies for tens of millions of Americans, a big question on the minds of many is Will my health insurance premiums go up? Unfortunately, the answer is likely to be a resounding yes, according to data compiled by the Kaiser Family Foundation (KFF), the nonprofit health research institute. Heres how much more individuals and families of four can expect to pay for their healthcare premiums in 2026, unless Republicans decide to extend Affordable Care Act (ACA) enhanced premium tax creditssomething the majority of GOP congresspeople have repeatedly said they have no plans to do. Why are healthcare premiums likely to rise in 2026? Yesterday, eight Democratic and independent senators who are not up for reelection in the midterms next year voted to support a Republican Senate resolution that would fund the federal government and thus end the longest U.S. government shutdown in history. However, the agreement did not include the primary thing that Democrats had been holding out for: an extension of the Affordable Care Acts (ACA) expiring enhanced premium tax credits. This is a credit that millions of Americans received from the federal government to help pay for the cost of Americas expensive healthcare premiums. As part of the deal to reopen the government, the Senate Democrats got the Republicans to agree to a vote on extending healthcare credits before the end of the year. But that is hardly a concession, as with the government now looking set to reopen (the House still has to vote), Democrats have no leverage over their Republican counterparts to compel them to vote in favor of the tax credit extension. Without the extension of the tax credits, tens of millions of Americans will pay more for their health insurance in 2026and in many cases a lot more. The increased financial burden will significantly affect already cash-strapped Americans. How much more the average American will have to pay for their already costly healthcare will depend on their income level. How much health insurance premiums will rise for individuals According to KFF data, individuals can expect to pay up to $1,836 more per year for their healthcare premiums. Heres how that breaks down by income level: $18,000 (115% of the Federal Poverty Level): $378 more $22,000 (141% FPL): $794 more $28,000 (179% FPL): $1,238 $35,000 (224% FPL): $1,582 $45,000 (288% FPL): $1,836 $55,000 (351% FPL): $1,469 $65,000 (415% FPL): Varies How much health insurance premiums will rise for a family of four The dollar amount increases for families of four are even worse, according to KFF. Families of four can expect to pay up to $3,735 more per year: $40,000 (124% FPL): $840 more $45,000 (140% FPL): $1,607 $55,000 (171% FPL): $2,404 $75,000 (233% FPL): $3,368 $90,000 (280% FPL): $3,735 $110,000 (342% FPL): $3,201 $130,000 (404% FPL): Varies As KFF notes in its report, In other words, expiration of the enhanced premium tax credits is estimated to more than double what subsidized enrollees currently pay annually for premiumsa 114% increase from an average of $888 in 2025 to $1,904 in 2026. Non-ACA health insurance premiums will likely rise Its not just the ACA. Americans with employer-based health insurance will likely also see their premiums increase in 2026. According to an NPR report, many employees could see their paycheck deductions for employer-sponsored health care plans surge by 6% to 7% in 2026. Unfortunately, this should come as little surprise, as employer-based healthcare premiums have been surging for more than 25 yearsfar outpacing the rate of inflation. As NPR noted, in 1999, the average employer-sponsored health insurance plan for a family of four had a premium cost of $5,791. By 2024, that premium had skyrocketed to $25,572a 342% increase. Public opinion overwhelmingly supports ACA tax credit extension A KFF poll published on November 6 found that Americans on both sides of the political spectrum support extending the enhanced premium tax credits, including 94% of Democrats, 76% of independents, and 50% of Republicans. Even 44% of MAGA supporters support the tax credit extension. That number jumps higher among Republicans who dont identify as MAGA, with 72% of non-MAGA supporters among Republicans and Republican-leaning independents supporting the extension of credits. Politicians in Congress will have to answer to those same voters come the midterms next year, when many Americans will be feeling the impact of higher premiums.
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E-Commerce
To the uninitiated, the term Scope 3 might sound like an obscure technical label. However, for those managing corporate carbon emissions, the term can inspire a range of emotions, from dread to dismay. Scope 3 emissions are generated by indirect upstream and downstream operations, and typically account for the largest share of a companys carbon footprint. They also lie outside the organizations direct control. Although one of the sustainability agenda’s most daunting items, technology can provide solutions to the Scope 3 challenge. There’s mounting pressure to tackle these emissions, as institutional investors such as pension funds pay close attention to the climate footprint of their portfolio’s companies. Better-informed consumers seek out more sustainable choices and reward those choices with shifted brand loyalty. And around the world, governments are tightening regulations on emissions levels and climate disclosure requirements. The elusive, indirect nature of Scope 3 emissions Because they are indirect, Scope 3 emissions are extremely difficult to capture, analyze, and report on. These emissions are generated by everything from the extraction of raw materials to manufacturing, logistics, and distribution. They’re emitted during customers use of products and the processes needed to reuse, recycle, or dispose of items. Without the right software and systems, measuring and managing these emissions means engaging with hundreds of supply chain partners, each with different data formats and methods of carbon footprint accounting. It’s time-consuming and can lead to inaccuracies. Many supply chain operators struggle to integrate emissions and waste data into their own systems, much less those of suppliers and customers. While supplier surveys are one way to collect supply chain data, survey fatigue is a significant concern. Supplier data is often unreliable or backward-looking and cannot be used to inform real-time sustainability decisions, minimize future emissions, or design strategies that accelerate progress toward sustainability goals. The turn to tech Fortunately, there are solutionsand technology plays a critical role. A network-based software platform can track and monitor all activities and events across the supply chain, including those from multiple suppliers and customers, in real-time. Here are three ways in which technology can help. 1. AI-driven data management for performance data Using artificial intelligence, procurement and transportation activity data from disparate sources can be consolidated and translated into emissions performance data. This provides the reliable, timely, and accurate information needed to manage and reduce Scope 3 emissions, fulfill sustainability reporting requirements, and optimize supply chain efficiency. Visualizing emissions levels across the supply chain, companies can evaluate trade-offs between sustainability and traditional supply chain performance indicators. In short, carbon efficiency becomes a key factor in decision-making. Supply chain partners also gain a better understanding of their carbon footprint, enabling them to meet their own emissions goals. 2. Network-powered platforms for end-to-end visibility When managing something as complex as Scope 3 emissions, end-to-end supply chain visibility is critical. A network-based software platform achieves this by bringing together data from multiple organizations, enabling carbon emissions modeling and supply chain optimization. This approach enables smarter decisions on everything from raw material sourcing to supplier and distribution partner selection, reducing value-chain energy and waste. Companies work with distribution partners to reduce partially filled or empty trucks and to design more fuel-efficient routes for lower Scope 3 emissions. Companies can select supply-chain partners with the most carbon-efficient operations, equipped to measure and share their emissions data. Identifying carbon hotspotswhether by product type, raw material, or geographic locationenables supply chain element design or reconfiguration to account for emissions levels. 3. Forecasting and returns management technology to reduce waste Scope 3 emissions are embedded in the things companies sell and dont sell. Overproduction and the creation of excess inventory lead to products unsold or in landfills, increasing waste and generating unnecessary energy consumption for manufacturing and transport. Demand forecasting technology enables companies to produce more informed forecasts, allowing them to more accurately predict demand, anticipate fluctuations, and optimize production and inventory management. They’re therefore more likely to meet waste and sustainability goals regulations. Meanwhile, data-driven reverse logistics simplifies the process of retrieving and remerchandising returned goods. These solutions accelerate returning products to the shelf to be sold at full price rather than being discounted or worse, discarded as landfill. Returns processing can also reroute damaged or obsolete returned products into recommerce channels. Seize the decarbonization advantage Operational efficiency in supply chains is all about working with partners, and carbon efficiency is no different. Technology is the connective tissue that, by consolidating data from a wide range of organizationssuppliers, shippers, warehouse operators, retailers, and othersenables smart planning, global coordination at scale, and enhanced supply chain optimization. The task may look daunting, but technology makes it eminently possible to manage Scope 3 emissions. And with supply chain emissions responsible for over 50% of the global total, companies using streamlined data and digital tools to tackle emissions can gain a decarbonization advantage. Not only will the companies meet their sustainability goals, but they’re strategically positioned as a leader in a low-carbon economy. Saskia van Gendt is the chief sustainability officer at Blue Yonder.
Category:
E-Commerce
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