Wells Fargo uncovered four specific participant characteristics that correlate with a significantly better financial life.
Tag: Retirement Readiness
The new guidelines offer a practical framework to help global and regional employers better understand how much money different workers need to save for a stable retirement.
Looking at the various sources of households' estimated retirement income, the Center for Retirement Research at Boston College found that even the one it felt was most reliable shows roughly half of households are likely to fall short of a target replacement rate of 75%.
GoBankingRates finds that needing to pay off credit card and other debt is a major roadblock to retirement saving.
In addition, to help employees reduce their debt stress and maximize their retirement plan savings, more employers are developing financial wellbeing initiatives, Arthur J. Gallagher & Co. found.
The challenge of learning to think strategically impacts plans of all sizes, says Mel Hooker at Wells Fargo; even large employers with ample resources can have trouble setting goals and knowing how to pursue them.
Ninety-four percent said they would keep all or at least some of their money in a target-date fund that guaranteed an income stream for life, an AllianceBernstein survey found.
BMO Wealth Management U.S. says individuals should know to plan for living beyond the average life expectancy and what medical expenses to expect, among other things.
The Standard recommends automatic plan features as well as managed accounts.
Lincoln Financial Group’s Jamie Ohl speaks about the opportunity for plan sponsors to think about their participants’ financial stressors in a more sophisticated way, supporting all the generations in a targeted manner.
People who were asked to envision their lives in their 60s through 80s thought about saving more, where income would come from and working during those years.
In a study of eight countries, State Street found that the retirement structures with the highest objective rankings did not necessarily correspond to the happiest respondents, and it offers suggestions for policymakers, retirement plan sponsors and providers.
However, 20% said they do not understand the process for withdrawing money from their 401(k) in retirement, according to a Charles Schwab survey.
Many contributing employees only save enough of their pay in defined contribution retirement plans to receive all available matching contributions—giving the employer significant influence over savings behaviors.
Only 33% of Americans are comfortable with their retirement readiness level.
“Millennials in particular should pay off student loans and other debt, so that they can take steps to focus on longer-term issues, such as retirement security," says Anna Rappaport, with the Society of Actuaries.
Many participants see the match percentage as a suggestion for how much to save; the majority of participants support automatic plan features; and even participants who are hands-on with investing like TDFs, J.P. Morgan found.
While defined contribution plans showed resilience during the Great Depression and recovery, more can be done to help participants, Transamerica Center for Retirement Studies says.
EBRI says that if the Automatic Retirement Plan Act of 2017 was combined with auto-portability, the retirement savings shortfall of $4.13 trillion would be reduced by $932 billion, or 22.6%.
The legislation would strengthen consumer protections, improve access to retirement savings plans for part-time workers, help increase women’s financial literacy, and give specific support to low-income women and survivors of domestic abuse.