Imagine for a moment that your elderly mother slips and falls and breaks an arm and a leg. She is hospitalized and undergoes rehab — for 12 weeks. Most people think of chronic illnesses when they think of long-term care, but accidents can also trigger the need for extended nursing care, as well as physical and occupational therapy.
Employees may ask you for advice about how much of their income they should be saving for retirement, how much they should already have saved, and how much they will need. It’s never a good idea to give one-size-fits-all answers to these important questions, but it’s good that you’re interested in helping participants learn more.
If your workforce includes recent college graduates, it’s likely that some of them have debt associated with their college years. Student debt may play a large part in the finances of these young (and even not-so-young) employees; that’s why a complete picture of employee financial wellness should consider it. (more…)
For many couples, retirement planning takes on fresh importance once their children leave the nest, especially if they have put off savings during the child-rearing years. If this is your situation, think about directing a greater share of your income toward your retirement. It may be helpful to devise a strategy several months before you face an empty nest, figuring out how far behind you are in building your nest egg. Having a written budget is critical, as is auto-depositing your contributions. That way you’re not tempted to spend your increased income once the kids are launched.
Everybody imagines retiring early, but few people manage to do it. A recent Willis Towers Watson survey reported that far more working Americans are planning to retire after age 65 (46%) than before it (30%).1 Here are five steps you can take to jumpstart the process.
It was a good year for individual account plans, including 401(k)s and 457s. In fact, 2017 may go in the record books as the first year the number of plans with an average auto-enrollment deferral rate of 6% exceeded the number of plans with a default deferral rate of 3%, as it has commonly been.
[Written by Carla Seely]
Organizing and planning for your family’s financial well-being can be challenging at the best of times. However, there are many challenges involved in managing and maintaining a household as a single parent. Being a single parent means you have less money to spare, and there is a pressing need to have a solid long-term financial plan because in most cases there are no alternative sources of income. (more…)
The shift away from traditional pension plans means today’s employees are largely responsible for their own retirement security. Yet many seem to long for the “good old days,” at least in the sense of knowing they will receive a monthly income throughout retirement.
What role should companies play in the retirement security of their employees, especially as it relates to steady retirement income? And how can employees best meet the need for a retirement income they can count on? Those were among the questions explored recently with about 1,000 U.S. employees.
While 54% of the survey’s respondents said they retain primary responsibility for their own retirement security, 27% said companies are primarily responsible, and 19% believe it’s the government that has primary responsibility. Asked if they would prefer a set retirement paycheck for life from their employer over a lump sum of money to invest themselves, 58% preferred the steady paycheck. Interestingly, that sentiment came not only from Baby Boomers, but also from Millennials.
Employees continue to want to partner with their employers in the planning and execution of their retirement savings, the survey found. In fact, they said they want companies to be more involved in providing for their retirement security in the next five to 10 years; 61% of respondents agreed with that sentiment, compared to just 9% who said the employer should be less involved.
When asked whether they would prefer to set aside part of their salary into a company-sponsored retirement plan or into the Social Security program, about three-quarters said they prefer to channel their money to the company plan. In fact, 56% said they would prefer to save on their own rather than paying into Social Security, if those were the only two choices. Forty-four percent preferred Social Security to saving on their own.
This information, which was gleaned from MetLife’s Role of the Company Survey2, released in April 2018, aligns with research that found a crisis in financial confidence among single female retirees; close to half of those surveyed are not confident their savings will last through age 90.3
The concept of a paycheck for life could be realized, even without traditional pension plans, through the purchase of annuities. Among single retirees, 71% of women with an annuity felt confident that they could live the retirement lifestyle they want, compared to 56% of those without an annuity. The figure was 68% for single male retirees, whether or not they owned an annuity.
3 http://www.limra.com/Posts/PR/News_Releases/LIMRA_Secure_Retirement_Institute_Single_Retirees_Feel_More_Vulnerable_to_Longevity_Risk.aspx
The same research shows that working with a financial advisor can have a significant impact on retiree confidence. Three out of four single men and women retirees who work with an advisor were confident in living the lifestyle they want, while 66% of single men and 54% of single women who do not work with an advisor feel that way.
Soon-to-be-retirees are sometimes unclear about how their finances will actually look in retirement. You may be offering them financial wellness information, but may also be wondering what you can learn from the Baby Boom generation’s actual retirement experience. That’s the exact topic of an Insured Retirement Institute (IRI) annual survey and report, now in its eighth year. While the survey indicates a generally positive financial picture for current Boomer retirees, many are not confident with their preparedness. Fifty-eight percent of Baby Boomers have retirement savings in 2018, up from 54% in 2017. Of the Boomers who have retirement savings, 43% have $250,000 or more, up from 32% last year. Still, just 25% of Boomers think their money will last throughout retirement, and 28% said they are doing (or did) a good job with their financial preparation for retirement. As far as who is doing the best job of preparing for retirement, the survey shows it’s those who work with a financial professional; these have at least $100,000 saved compared to 48% of those without a financial professional.
Read more from the IRI report, Boomer Expectations for Retirement 2018, here: https://tinyurl.com/IRonlineBoomers.
