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.
...and thanks for your support of ASEC
Nevin E. Adams, JD
Director, American Savings Education Council (ASEC)
So, what IS the biggest obstacle to retirement savings? Click here for more info.
Action Plans - Practical Tips About Saving
A growing number of retirement plan participants are finding a new option on their plan menu: the Roth 401(k). And it's an option that can apply to 403(b) (nonprofit) and 457(b) (public-sector) retirement plans as well. So, should you "Roth"or not?
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 401(k) account balance for participants consistently participating in their 401(k) plans for the four years from 2007 through 2011 was up 23.5 percent at year-end 2011 compared with year-end 2007, despite the sharp decline caused by the bear market in 2008, according to a report released by EBRI and ICI.
America Saves has released the results of a new Personal Savings Index (PSI), based on a survey of more than 1,000 representative adult Americans, which asked them questions about "personal saving related to goals ranging from an emergency fund to retirement." It shows that there is greater interest in personal saving, with an aggregate average score of 71 percent, than in saving effort made, at 62 percent.
America Saves is making available a new savings tool to allow Americans to quickly assess their savings effectiveness.
The Wells Fargo Middle Class Retirement study notes that about half (52 percent) of the middle class between the ages of 25 and 75 say they are "confident" they will have enough saved for their retirement, though less than a third (29 percent) say they have a written plan for their retirement. Thirty-one percent of Americans in prime retirement saving years - 40 to 59 - say they have a plan, versus 69 percent who do not.
A new study by TIAA-CREF shows that 55 percent of working Americans prefer to receive one-on-one financial advice from a financial advisor. Just 36 percent of all workers, however, say they regularly rely on financial advice offered by their employers.
Thirty-six percent of workers report that they always or usually live paycheck to paycheck, a recession-era low from its peak of 46 percent in 2008, according to CareerBuilder. In 2012, 40 percent of workers reported they always or usually live paycheck to paycheck. Sixty-five percent participate in a 401(k), IRA, or other comparable retirement plan, down from 67 percent last year, though fewer workers have had to reduce their contributions to retirement plans or personal savings - 17 percent in 2013 compared with 20 percent in 2012. There ARE several expenses that some workers say they will not give up, regardless of financial concerns.
The 56th Annual Profit Sharing and 401(k) Survey from the Plan Sponsor Council of America notes that participants are saving an average of 6.8 percent of pay (up from 6.4 percent in 2011 and 6.2 percent in 2010), and that 95.3 percent of plans made the matching contribution in 2012, when provided for in the plan (up from 89.0 percent in 2010 and 85.2 percent in 2009). The average company contribution is now 4.5 percent of pay, up from 4.2 percent in 2011 and 3.7 percent in 2010, and Roth after-tax contributions are now available at more than half of the 686 companies surveyed.
It's All Academic
A new research report notes that while policymakers have embraced financial education as a necessary antidote to the increasing complexity of consumers' financial decisions over the last generation, their meta-analysis of the relationship of financial literacy and of financial education to financial behaviors in 168 papers covering 201 prior studies found that interventions to improve financial literacy explain only 0.1 percent of the variance in financial behaviors studied.
A new report on the Effect of Financial Literacy and Financial Education on Downstream Financial Behaviors notes that educational interventions and financial literacy as measured to date are only weakly linked to behaviors - much less so than in comparable domains, such as workplace education or career counseling interventions. Diminishing returns also mean that more education isn't always better unless education is timed closely to points of decision. See more at:
Do Financial Networks Matter in Retirement Investment Decisions? Experimental Survey Evidence.
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!
Kid Stuff? The greatest lessons about saving money hit us when we're kids.
Having a little trouble adjusting to the time change? The Dangers of Daylight Savings Time.
Of the three primary utensils we use to eat (fork, spoon and knife), which was missing at the first Thanksgiving feast? Click here for the answer!