According to a report from the National Institute of Retirement Security, “Retirees with DB pensions know they are receiving a steady check despite economic conditions. In contrast, retirees may be reluctant to spend out of their 401(k)-type accounts if their savings are negatively impacted by market downturns.”
Data and Research
The study, which evaluated pensions against hypothetical 401(k) plans, finds 77% of teachers in six states will work long enough in the same retirement system to earn benefits of greater value and security from the lowest-tier pension, compared to an idealized 401(k) with low fees and no investment mistakes.
Employers have a dual concern about losing skilled workers and increasing benefit costs from employees who retire too late.
A new EBRI analysis shows purchases of a deferred income annuity at age 65 (deferring 20 years with no death benefits) result in an overall improvement in retirement readiness when purchasers annuitize 5%, 10%, 15%, and 20% of their 401(k) balance.
Results of a new Pew survey show about four in 10 non-investing individuals who express distrust in their primary financial institution said they would opt out of an automatic retirement plan enrollment.
The majority think they are on track for a secure retirement, but many worry about high health care costs.
For those 75 and older, out-of-pocket medical costs amount to 20% of their income.
A new cut of survey data from the LIMRA Secure Retirement Institute (SRI) shows four in ten single retirees believe their savings won’t last if they live to age 90, while just over one-third of married or partnered retirees feel the same way.
Both retirement plan sponsors and employees can learn lessons from the experiences recounted by retirees surveyed by the Transamerica Center for Retirement Studies.
Among Asians, Blacks, caregivers, Latinos, LGBTQ Americans and women, Prudential Financial found some groups are better prepared for retirement, and some groups focus more on helping others than themselves.
For the 10th consecutive year, their top financial resolution for the New Year is to save more, Fidelity learned in a survey.
Of the 66% who responded in favor of the plans, 55% stated the likelihood of lowered costs for themselves is their top reason for supporting MEPs, while 54% said they were interested in reduced fees for employees.
The Plan Sponsor Council of America’s 61st Annual Survey of Profit Sharing and 401(k) Plans finds the most used benchmarks for retirement plan success remain participation and deferral rates.
The availability of Roth contributions has doubled in the last decade, and more plan sponsors are using a default deferral rate with automatic enrollment that is higher than 3%, a Plan Sponsor Council of America survey found.
At the time of an analysis from the Center for Retirement Research (CRR) at Boston College, 62% of eligible workers were participating, and 93% of contributing participants had not changed their default deferral rate of 5%.
According to John Hancock data, helping employees reduce their financial worries is well worth employer’s time and attention.
And 401(k) providers are the top source for financial advice.
On average, they offer 27 core investment options, according to ICI and BrightScope
ESOP participants have an average retirement balance of $170,326, more than twice the $80,339 that other workers have saved
However, a survey finds retirees with a guaranteed income stream from a pension or annuity are able to spend more.