Welcome to the June 2014 issue of $avings Account$, a monthly publication of the American Savings Education Council (ASEC)!
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!
It's that time of year when graduations are in the air. Last issue we asked $avings Account$ readers, "What's the best piece of advice you've ever given a graduate - or been given as a graduate?" The list was varied, and informative - and shows us all again that it's never too late to...learn. Check them out at http://www.choosetosave.org/tips/SURVEY%20SAYS%20-%20GRADUATION%20ADVICE.pdf
Oh - and if you'd like to add to the list, you can (still) do so at https://www.surveymonkey.com/s/asecpoll6
The summer months are traditionally associated with summer reading, and whether it's at the beach, on the deck, or simply while riding to work, it's a good time to line up your summer reading. This issue, a question from a reader: "What's your favorite read about saving or financial preparedness?" Also - what (else) is on your summer reading list?
RESPOND to this week's survey at https://www.surveymonkey.com/s/ASECPoll7
Share your insights and experience - weigh in on our survey - your response is anonymous.
Action Plans - Practical Tips About Saving
When we are young(er), there are a lot of demands on our income - setting up that first apartment, that first "real" car, buying a house. Then kids come along, and many leave the work force during crucial savings years to raise those children and - with no employer-sponsored retirement savings program and no paycheck during that time - those who do can find themselves short of their retirement savings needs. Fortunately, you may have an ability to "catch up" on your retirement savings. http://www.choosetosave.org/tips/SA16CatchingUponRetirementSavings.pdf
When you think about saving, you generally think about setting money aside for the future or for a specific goal. But once you reach the goal of retirement, you will want to be careful about how you withdraw those savings. After a certain age, you can be fined if you don't start drawing down from a tax-preferred savings plan. http://www.choosetosave.org/tips/SA14RMDREQUIREMENTS.pdf
When you sit down to make choices with your retirement plan investments, you are generally presented with a list of fund choices - and given an opportunity to choose those that will help your retirement savings grow. However, most of us are not investment experts - and even if you have the time, and get the help to make a good decision, you may well be too busy to keep an eye on those choices on a regular basis. That's why a growing number of retirement plans now make available an option that can help you make the right investment choice for your retirement plan. http://www.choosetosave.org/tips/SA15TheBasketYouCanPutAllYourEggsIn.pdf
News You Can Use
Only about 1 in 4 workers who obtained professional investment advice from an advisor paid through fees or commissions followed all of it - and the reason most often cited? http://www.ebri.org/pdf/FF.282.Advice.22May14.pdf
When asked "not counting savings for retirement, which of the following do you use for putting money aside as savings?" more than half of respondents selected bank savings account (61 percent) and/or credit union savings account (52 percent), according to an online survey by America Saves. The majority of respondents reported saving for multiple goals, and only 15 percent reported they were saving for one goal. Of those who selected only one goal, 34.1 percent choose saving for retirement. http://americasaves.org/images/howamericasaverssave.pdf
The average IRA account balance in 2012 was $81,660, while the average IRA individual balance (all accounts from the same person combined) was $105,001. Overall, the cumulative IRA average balance was 29 percent larger than the unique account balance. Males had higher individual average and median balances than females: $139,467 and $36,949 for males, respectively, versus $81,700 and $25,969 for females. http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=5393
For individuals in the EBRI/ICI database during May, the average account balance rose 3.0 percent for participants ages 25-34 with one to four years of tenure (and consistent participation since 2011), while the average account balance ended the month 1.9 percent higher for participants ages 55-64 with 20-29 years of tenure. http://www.ebri.org/pdf/may%202014%20monthly%20deltas%20with%202011%20baseline.pdf
Respondents to the Bank of America's latest Merrill Edge Report say having enough money to live "in the here and now" is a more popular priority (63 percent) than saving more for the future (48 percent). While more than half (55 percent) of respondents surveyed say they're frightened of not having enough money throughout retirement, many won't consider cutting back on indulgences such as entertainment (33 percent), eating out (30 percent) and vacations (28 percent). http://www.merrilledge.com/Publish/Content/application/pdf/GWMOL/Merrill_Edge_Report_Spring_2014.pdf
A new report by the Government Accountability Office (GAO) notes that several work-related factors may cause people to claim Social Security benefits early and suggest they may face challenges in continuing to work at older ages. For example, those who worked in physically demanding blue collar jobs were 55 percent more likely to claim benefits prior to their full retirement age compared with those in all other occupations after controlling for other factors. In addition to work-related characteristics, other factors, such as having poorer expectations of living to age 75, significantly increase the likelihood of claiming early. http://www.gao.gov/products/GAO-14-311
According to the latest research from the Principal Financial Group, the number of 401(k) participants choosing to increase their contribution rates has increased almost 70 percent since 2009, and the average employee contribution rate has increased 14 percent during the same time period. http://www.principal.com/about/news/insights/2014/retirement-savings-research.htm
Last year employees experienced a sizeable increase in overall financial stress, with 23 percent indicating "high" or "overwhelming" levels of stress compared with 18 percent in 2012, according to Financial Finesse. Thirty-one percent of Generation X females (ages 30-44) reported high or overwhelming levels of financial stress compared with 22 percent reported by their male counterparts. Low-income females (making under $60,000 a year) were twice as likely as low-income males to report overwhelming financial stress. http://www.financialfinesse.com/wp-content/uploads/2014/05/Financial-Stress-Report_2014_FINAL.pdf
Fidelity Investments has conducted a study of 13 million 401(k) investors across metropolitan regions, and notes that San Jose, California, and San Francisco stood out as the cities with the highest average Total Savings Rate. The report claims that the typical U.S. worker in these areas stashes about 14.6 percent of their annual salary away in 401(k)s (both employee and employer contributions). http://www.fidelity.com/inside-fidelity/employer-services/fidelity-401k-geographic
According to the second annual Guardian Workplace Benefits Study, while 4 in 10 employees identify themselves as DIYers (Do-It-Yourselfers) when it comes to making financial decisions, 52 percent of DIYers attribute all or most of their financial preparedness to the benefits and retirement plans available through their employers. Yet because DIYers are emotionally resistant to being helped, employers and providers alike need to rethink their approach to reach this segment, according to the report. http://wbs.guardianworkplace.com/
About a third of GenX women (compared with one-fifth of boomer women) report that they find it more difficult to pay their mortgage or rent, and just under one-fifth have stopped contributing to their retirement plans, while 13 percent and 9 percent, respectively, of GenX and boomer women have prematurely withdrawn qualified retirement assets, according to a new survey by the Insured Retirement Institute (IRI). http://myirionline.org/docs/default-source/research/baby-boomer-and-genx-women-report-2014-web.pdf?sfvrsn=4
A new report by Fidelity Investments finds that pre-retiree nurses are on track to replace 59 percent of their ending net income, while their average total savings rate is 12.9 percent. Despite their desire to prepare for retirement, only 14 percent of nurses take advantage of financial guidance. That number drops to 9 percent for younger nurses. http://image.fidelityinvestments.com/lib/fe901570706c0c7b76/m/1/B2B_12129_NursesSavingsFINAL.pdf
It's All Academic
Using a new dataset linking administrative data on investment performance and financial knowledge, a new research study examines "whether investors who are more financially knowledgeable earn more on their retirement plan investments, compared to their less sophisticated counterparts," finding that "overall, financial knowledge does appear to help people invest more profitably; this may provide a rationale for efforts to enhance financial knowledge in the population at large." http://www.nber.org/papers/w20137
A new paper notes that evidence on the effectiveness of financial education and formal savings account access is lacking, particularly for youth. Randomly assigning 250 youth clubs to receive either financial education, access to a cheap group account, or both, the study found that the financial education treatments increase financial literacy; the account-only treatment does not. http://www.nber.org/papers/w20135
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 http://www.choosetosave.org/psaplayer/index.html
When we last left Savingsman he was busy helping countless Americans Choose to Save for their future. Like this young couple who realized they shouldn't rely totally on Social Security. http://www.choosetosave.org/psaplayer/spotsets/savingsmannational60.html
Feel free to use these in YOUR education campaigns!
How are you saving for your future?
ASEC Partner Updates
The CFA Institute through its Future of Finance project has created a consumer facing document entitled the "Essentials of a More Secure Retirement," which outlines some of the common principles and best practices related to retirement planning. This information, as well as additional links and related resources, can now be found online on the Future of Finance pages of the CFAInstitute.org website at http://www.cfainstitute.org/learning/future/learn/Pages/retirement.aspx
The Women's Institute for a Secure Retirement (WISER) is sponsoring a briefing and reception on June 10 titled "Perspectives of Millennial and Boomer Women: Who's Better Off?" This event will feature a panel discussing recent research on the financial well-being of Millennials and Boomers. http://www.wiserwomen.org/
The SEC's Office of Investor Education and Advocacy has issued an Investor Bulletin to explain some of the most common mutual fund fees and expenses. As a general introduction to mutual fund fees and expenses, this Investor Bulletin does not identify all of the fees that you may pay to buy and own shares in a mutual fund. This Investor Bulletin will, however, familiarize you with some typical mutual fund fees and expenses and show you how those fees and expenses reduce the value of your fund's investment return.
Buck Consultants has devoted a section of their company website to the topic of Retirement Readiness and is in the process of launching Savings InSight, an automated retirement builder that delivers a personalized solution based on each individual's circumstances, with two clients.
According to the Social Security Administration, the boy's name that enjoyed the biggest surge in popularity was Jayceon, while the girl's name with the biggest surge in popularly was Daleyza. The biggest decrease in popularity among boy's names was Austyn; the largest drop in popularity among girl's names was for Litzy. The most popular boy's name in 2013 was Noah; the most popular girl's name was Sophia. You can also check out the most popular names by state and decade, as well as the top five names in each of the last 100 years. http://www.socialsecurity.gov/oact/babynames/rankchange.html#ht=1
The Consumer Financial Protection Bureau (CFPB) has released four easy-to-understand booklets to help financial caregivers. The Managing Someone Else's Money guides are for agents under powers of attorney, court-appointed guardians, trustees, and government fiduciaries (Social Security representative payees and VA fiduciaries.) http://www.consumerfinance.gov/blog/managing-someone-elses-money/
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If you'd like to submit materials for posting on www.choosetosave.org, see http://www.choosetosave.org/resources/index.cfm?fa=materials
The North American Securities Administrators Association (NASAA) has an immediate opening for a Manager of Communications & Investor Education. Details are available at:
The Commodity Futures Trading Commission (CFTC) Office of Consumer Outreach has an opening for a Consumer Content Specialist. Details are available at:
The Commodity Futures Trading Commission (CFTC) Office of Consumer Outreach has an opening for a Consumer Outreach Specialist. Details are available at:
Which holiday came first - Mother's Day or Father's Day?
Have you figured out how much you will need to save to fund a comfortable retirement? Recently? Have you downloaded the NEW EBRI Ballpark E$timate app? MORE.
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