On the first Tuesday of each month, the American Savings Education Council (ASEC) shares information about the latest research and updates on new (and old but relevant) tools, as well as keep you up-to-date on various events, conferences, and symposiums relevant to ASEC's Mission: To make saving and retirement planning a priority for all Americans.
If you've got something to share - an event announcement, a product update, new research - please email me at firstname.lastname@example.org, and we'll be happy to pass it along in our next issue!
If you'd like to sign up - you can do so by clicking here.
An archive of past issues is available online by clicking here.
...and thanks for your support of ASEC
Nevin E. Adams, JD
Director, American Savings Education Council (ASEC)
Last issue we asked readers, what IS the biggest obstacle to retirement savings? Here's what you told us.
While it might seem far away now, it won't be long until the New Year, a time when many choose to resolve to either set aside bad habits or commit to better behaviors. Will you make any New Year's resolutions this year?
Action Plans - Practical Tips About Saving
It may seem too good to be true. Even Albert Einstein allegedly called compounding "the greatest mathematical discovery of all time." There's no sleight of hand involved, but-as with most "magic"-what is really going on is a lot simpler than you might think. Here's how it works.
A growing number of employers are making it easier to join workplace retirement savings plan with a new "automatic enrollment" feature that allows you to start saving without having to take the time to fill out (or remember to turn in) an enrollment form. But while that's a convenient and easy way to start saving for retirement, it may also be making it easy for you to not save enough. For more info, click here.
America Saves Week is February 24, 2014 - March 1, 2014.
America Saves Week is an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status. Sign up by clicking here.
News You Can Use
The average amount of lump sum distributions (LSDs) in 2012 dollars was $20,781, with a median (mid-point) amount of $12,355. In terms of the value at the time of the distributions, the average amount was $15,934 and the median amount was $10,000. For additional info, click here.
TD Ameritrade's Self-Employment and Retirement Survey found that while many self-employed people expect their savings to fund their retirement, 40 percent aren't saving regularly, and 28 percent currently aren't saving at all. More than a quarter (29 percent) of Generation X and 32 percent of Generation Y who are self-employed say they currently do not save for retirement. Additionally, 83 percent of self-employed respondents who are currently saving for retirement say they have had to pause or cut back on their savings due to various obstacles, compared with 70 percent of traditionally employed people who have paused at one time or another.
U.S. employees who save for retirement through their employers' 401(k) plans are not planning to save more for retirement over the next year as compared with last year, and those closest to retirement are decreasing their planned savings despite increasing concern about health care costs in retirement, according to the 2013 Mercer Workplace Survey of 1,506 U.S. retirement plan participants who also receive health benefits. Amid general optimism about the economy, survey participants over age 50 have lowered their anticipated 401(k) contribution amount by more than 18 percent. For additional info, click here.
According to the 2013 Jackson Investor Education Survey, which gauged the opinions of pre-retirees (men and women investors between the ages of 45 and 65) with more than $200,000 in investable assets, only 17.8 percent of men and 10.7 percent of women said they felt they had the financial education needed to make important investing decisions. The majority of those surveyed don't believe Social Security will be a significant portion of their retirement income when they retire, with nearly 67 percent of men and 64 percent of women saying they think Social Security will be a small supplement to their retirement income, not a significant source of income. For additional info, click here.
A survey by BlackRock finds that 45 percent of participants are not saving because they don't know how much they will need, and that 77 percent would not only save, but increase their savings if they knew how much they needed to save per dollar of income in retirement.
According to the 2013 Women, Money & Power Study from Allianz Life Insurance Company of North America, millennial women were the most interested in learning about "financial planning and investing" (69 percent versus the next highest age group, 65 percent for ages 35-44) and also "learning complex financial topics like compound interest, market capitalization, debt ratios and bond ratings," (57 percent versus the next highest age group, 56 percent for ages 45-54). In addition, younger women had significantly higher interest in retirement planning than the next closest age group. For additional info, click here.
Six in 10 people (62 percent) age 50+ today are providing financial support to family members, and three out of five people (56 percent) age 50+ believe a member of their family is the "Family Bank," meaning someone who their extended family is most likely to turn to for financial help, according to a new report from Merrill Lynch and Age Wave. Half of pre-retirees age 50+ say they would make major sacrifices that could impact their retirement to help family members.
Stress is the number one workforce risk issue, ranking above physical inactivity and obesity, according to the 2013/2014 Towers Watson Staying@Work Survey, conducted by Towers Watson and the National Business Group on Health. While employers rank the top three causes of workplace stress as lack of work/life balance (86 percent), inadequate staffing (70 percent) and technologies that expand employee availability during nonworking hours (63 percent), employees rank inadequate staffing as the number one source of stress, followed by low pay or low pay increases, and unclear or conflicting job expectations. For additional info, click here.
What are the financial and operational consequences for companies whose older workers can't afford to retire? Click here to find out.
A core 25 percent of twenty-somethings are habitual savers who "always make sure" that they are saving for retirement, according to a report released by the Transamerica Center for Retirement Studies in collaboration with Aegon. The report notes that 57 percent of young employees believe that retirement savings are important but not a priority for them at the moment.
It's All Academic
About six in 10 workers (61 percent) with health insurance coverage report having experienced an increase in health care costs in the past year, and workers continue to report that is leading to other financial difficulties, according to a recent EBRI report. Among those experiencing cost increases in their plans in the past year, 32 percent state they have decreased their contributions to retirement plans, and more than half (57 percent) have decreased their contributions to other savings as a result.
Can Simple Informational Nudges Increase Employee Participation in a 401(k) Plan? Find out more by clicking here
New research published by the National Bureau of Economic Research notes that defined contribution plan participants "rarely adjust their portfolio allocations, suggesting that their investment choices and consequent money flows are sticky and not discerning. Yet, the participants' inertia could be offset by the DC plan sponsors, who adjust the plan's investment options."
As part of its mission, the Choose to Save® program develops user-friendly multimedia materials to help individuals plan and save for their financial future, including free public service announcements (PSAs) using humor, powerful images, and compelling information to encourage viewers (and listeners) to take charge of their financial future. Each month we'll feature one of the PSA videos from www.choosetosave.org.
Feel free to use these in YOUR education campaigns!
The Savings Carol - you donâ€™t have to be a Scrooge about savings.
ASEC Partner Updates
AARP and the Small Business Administration have hosted a number of webinars throughout this year for encore entrepreneurs - those age 50 and older who are interested in starting or expanding a small business. Topics include assessing if you are ready to start a small business, how to write a business plan, and using social media to promote your small business. All webinars are free. To sign up for individual webinars or the entire series of 10 sessions, go to www.aarp.org/MoneyWebinars.
The Consumer Financial Protection Bureau (CFPB) recently commissioned a study of the size and scope of the financial information field and found that for every dollar put towards financial education, $25 is spent on financial marketing, which it says can make it difficult for consumers to find objective information. http://www.consumerfinance.gov/f/201311_cfpb_navigating-the-market-final.pdf
AARP has recently published a quiz on the basics of starting a small business as well as a quiz on landing a new job. Visit www.aarp.org/WorkResources to take the quizzes and to find many more resources on entrepreneurial and workforce issues.
Please Consider Becoming A Partner of ASEC. Find out MORE at http://www.choosetosave.org/asec/index.cfm?fa=join
If you'd like to submit materials for posting on www.choosetosave.org, see http://www.choosetosave.org/resources/index.cfm?fa=materials
Over half (54 percent) of workers expect to spend some time at work shopping online for the holidays, up from 49 percent last year, according to CareerBuilder. But you better watch out - one in five employers (22 percent) say they've fired someone for using the Internet for a non-work-related activity, and 7 percent of all employers pointed directly to online shopping at work. For more info, click here.
Those doing some shopping might be interested to know that if one were to try to acquire the array of gifts in the holiday classic "The Twelve Days of Christmas," you'd have to spend more than $27,000, according to the 2013 PNC Christmas Price Index. Here's how it breaks down for all you "true loves" out there.
Happy holidays to all - and best wishes for a Happy New Year!