Financial wellness is becoming increasingly important to plan sponsors. Financial problems decrease employees’ productivity, increase their absenteeism, and even affect their health. According to a report issued by the Consumer Financial Protection Bureau in August 2014, 7 out of 10 American workers say that financial stress is their greatest cause of stress.
The team at The Participant EffectSM knows that a lot of people think retirement plans can be complex and often confusing. However, as individuals assume more and more responsibility for planning for their own retirements, it’s important that you understand some of the terminology you’ll encounter:
A basic principle of investing is the efficient markets hypothesis, which states that investors are rational and will make logical investment decisions that aren’t based on emotion. If that is true, however, how can we explain market crashes, like the financial crisis in 2008, or the market crash in 1987, or even the crash in 1929?
Helping your plan participants understand the importance of retirement planning and how they can best accumulate assets is one of the primary responsibilities of plan sponsors. While plan participants don’t need to know every aspect of portfolio management theory, there are a few key concepts that every participant should understand:
Millennials are generally defined as people born after 1980, who grew up using digital technology and consuming mass media. In general, millennials have good financial habits, according to a 2015 Retirement Saving & Spending Study conducted by T. Rowe Price. However, the survey showed millennial women are falling behind on saving for retirement.
If you have read any literature on retirement planning or have received advice from a financial professional, chances are you were presented with the 70% rule, the one that suggests that retirees will need between 70 and 80% of their pre-retirement income in order to maintain their standard of living.
401(k) plans were established by Congress to encourage individual savings towards retirement. Offered through employers, the plans are generally available to eligible employees who are allowed to contribute a percent of their salary to the plan.
The need for retirement planning didn’t really exist until well into the 1970s. Up to that point, people worked until age 65, spent a few years in leisure through their life expectancy which was about 69. Many retirees of that era were able to coast into retirement with a cushy pension plan.
Today’s retirees are finding that retirement requires at least as much psychological and emotional preparation as it does financial preparation. So, retirement planning needs to include a thorough assessment of human assets and liabilities along with an assessment of financial assets and liabilities.
Everyone can learn some valuable lessons from Warren Buffet, arguably the most successful investor of all time. Buffet has two strict rules about investing that anyone would find, well, frustratingly simplistic.
With rising retirement costs, longer life spans, and the need to rely almost exclusively on one’s own assets for income, there is little margin for error in investing for retirement. When we’re talking about securing a comfortable income that needs to last as many as 25 or 30 years, mistakes made early on can be magnified to tragic proportions.
With rising retirement costs, longer life spans, and the need to rely almost exclusively on one’s own assets for income, there is little margin for error in investing for retirement. When we’re talking about securing a comfortable income that needs to last as many as 25 or 30 years, mistakes made early on can be magnified to tragic proportions.
Perhaps you’ve lost a job, faced an illness or have been delt a family crisis that emptied out your emergency fund. What are your next steps?
You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?
Or is it?
Social Security’s financial cliff is coming closer into view. Experts project that the fund that pays for government retirement benefits through FICA taxes will be depleted within the next 15 years.
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