Posts in Saving for Retirement
Social Security is About to Pay Out More Than it Takes In -- for the first time in decades

“By 2020, obligations to retirees and disabled Americans will cost more than Social Security’s revenue from payroll taxes, taxes on benefits, and interest earned on investments.

That imbalance is expected to continue until the SSA’s main trust fund—the Old-Age and Survivors Insurance fund—is depleted in 2034, at which time scheduled benefits would be cut 23 percent to retirees. This year’s projection is inline with last year’s Trustees Report.” Click here to keep reading.

Source: BenefitsPro

Boosting Effectiveness of Retirement Plan Communications

“Words have the potential to inform, encourage and empower. But the wrong words can be powerful in negative ways, leaving people uncomfortable, overwhelmed or confused. Using the right words is especially critical in financial matters. Employees need to understand their retirement plan options so they can make the best decisions for their future, but the general public often misunderstands words that are commonly used by financial providers, employers and others in the retirement planning industry.” Click here to keep reading.

Source: PLANSPONSOR

Ways and Means Moves Comprehensive Retirement Reforms Foreward

“The most powerful committee in the U.S. House of Representatives has advanced a powerful piece of retirement reform legislation – unanimously.

Signifying the importance of the issue, the first markup meeting of the House Ways & Means Committee for the 116th Congress on April 2 featured the approval of wide-ranging legislation to make it easier for businesses to offer retirement plans and for individuals to save for retirement."  Click here to keep reading.

Source: Napa.net

Janus Henderson Outlines Next-Generation Automatic Plan Features

“Automatic retirement plan features have put significant numbers of employees in the U.S. on a path towards retirement readiness, but employers could still do a lot more to overcome participant inertia.  

This is according to a new white paper published by Janus Henderson, “Defined Contribution Redefined.” According to Janus Henderson researchers, since the enactment of the Pension Protection Act of 2006 (PPA), automatic features have become common within defined contribution (DC) plans such as 401(k)s, 403(b)s and 457s. In particular, the main trio of automatic features—auto-enrollment, auto-escalation and automatically diversified qualified default investment alternatives (QDIAs)—have helped increase DC assets from $3.0 trillion in 2007 to $5.3 trillion in 2017.” Click here to keep reading.

Source: PLANSPONSOR

Why Finanical Wellness is a Must-Have Employee Benefit

“A recent PwC survey of U.S. employees showed that financial wellness is the most desired benefit exceeding even student loan repayment. According to the SunTrust National Financial Confidence Index, 43% of Americans don’t have $500 saved for emergencies and two-thirds report that financial stress keeps them up at night. That worry follows them to work, often leading to lower satisfaction in pay, decreased productivity and poorer health.” Click here to read more.

Source: EBN 

Health Care and Retirement

Over the last 20 years, healthcare costs have skyrocketed, outpacing the Consumer Price Index by 70 percent. According to the Employee Benefit Research Institute, to have a 90 percent chance of having enough savings to cover medical bills, a man would need $131,000 and the woman would need $147,000. How is the average American supposed to combat these increasing costs? Senior analysis T.J Berge believes that the answer may be combining an employee sponsored retirement plan with a High Deductible Health Plan. Click here to get more information about retirement savings.

Source: Innovest

National Retirement Security Week

According to Employee Benefit Research Institute, only two-thirds of U.S. workers are saving for retirement. The first National Retirement Savings Week (NRSW) occurred in 2006 when two Senators introduced the resolution establishing National Save for Retirement Week. The goal is that this week will spark a national conversation about the importance of saving for retirement. The National Association of Government Defined Contribution Administrators encourages business to provide resources and educate their employees on saving for retirement. For additional information, visit NAGDA’s official NRSW website.

Who is Eligible To Make 401(k) Plan Catch-up Contributions

"A catch-up contribution is an elective deferral made by a participant age 50 or older that exceeds a statutory limit, a plan-imposed limit, or the actual deferral percentage test limit for highly compensated employees."

This piece offers a concise discussion as to which parties are eligible to make a catch-up contribution to a 401(k) plan.

Click here to learn more about catch-up contributions and rules on eligibility.

Source: EisnerAmper