Friday Top Five: Retirement Related News for 5/29/15

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From BenefitsPro: Cashing in on financial wellness

A new study about wellness just published by Aon Hewitt shows that employees are keenly interested in financial wellness. More employers are concerned about whether their workers are saving enough, and not just for retirement. The report indicates that more than 90 percent of 250 large employers said they want to introduce or expand their financial wellness programs in 2015.

Employers are concerned about their workers reducing financial stress and improving productivity. There’s no question that money problems stress people out. Nearly 25 percent of employees say their finances have been a distraction at work, according to accounting firm PwC's 2014 study of financial wellness programs. And Americans have named money as their top source of stress every year since 2007, when the American Psychological Association started reported findings in its survey called “Stress in America.”

From Social Security: Look Who’s Turning 80: Social Security Announces Countdown to Agency’s 80th Anniversary

Anticipation fills the air as Social Security gets closer to the agency’s historic 80th anniversary and prepares to commemorate the August 14, 1935, signing of the Social Security Act.  Acting Commissioner Carolyn W. Colvin today announced the launch of the agency’s event-filled celebration, with many activities leading up to August 14.

“Social Security offers hope and protection for millions of people and some of the most vulnerable members of the American public,” Acting Commissioner Colvin said. “This was President Franklin Roosevelt’s vision in 1935, and the vision has never been clearer, nor has the work of our agency ever been more important than it is today.”

From NerdWallet: Xers, Your Retirement Clock Is Ticking

Generation X, this is not your parents’ retirement plan.

Unlike our mothers and fathers, we Gen Xers — those born between the early 1960s and early 1980s — are more likely to have had access to employer-sponsored retirement plans such as a 401(k) or 403(b) from early on in our careers. Most of us who have gotten married and started families did so at a later age than our parents did. Today, we have virtually unlimited access to financial data and analysis via the Internet.

All this should make saving and planning for retirement easy, right? Not so fast. With everything we’ve been through in our working lives — including the dot-com collapse in 2000, the 9/11 attacks in 2001, the Time of Shedding and Cold Rocks of 2007-2009 and two long overseas wars — it’s not hard to see why a sort of “analysis paralysis” has set in, impeding prudent financial planning for many.

From MarketWatch: Is your retirement planning future-ready?

Retirement planning is primarily focused on our capacity to finance our "objectives" in older age — certainly not incorrect, but increasingly incomplete.

Tomorrow's old age will be one that is far more technologically enabled than any previous generation in history — is your retirement planning future-ready and able to afford what doesn't exist yet, but will be necessary tomorrow?

Today we take our smartphones, tablets, notebooks and wearables for granted. We behave as if they were always here, but they are newcomers. Yet our lives have become increasingly dependent upon them. Now try imagining the future — what technologies might change how you will live in retirement?

From Forbes: Social Security Q&A: How Will an Early Retirement Benefit Affect a Spousal Benefit?

Today’s question asks how having taken an early retirement benefit will affect the amount of a later spousal benefit. The answer explains how excess spousal and survivor benefits are calculated and reviews the effects of claiming early.

Question: Since my wife took an early benefit at age 62, when she files for a spousal benefit on my record, it will not be 50 percent of my benefit. What will be her eligible percentage?

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Friday Top Five: Retirement Related News for 5/22/15

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Retirement is typically viewed as the end of the line – a time for rest, relaxation and the pursuit of interests long ago put on the back burner. But the narrative is far different for military retirees.

For starters, the average officer is only 47.1 years old – and enlisted personnel even younger at 43.2 – upon retirement from service. Most re-enter the job market. Military retirees, veterans in particular, must also deal with the trials of assimilation, which have proven especially difficult in the wake of the wars in Afghanistan and Iraq. Rising numbers of young vets have encountered hardship and homelessness.

The market meltdown and financial crisis of 2008 threw a huge monkey wrench into the retirement plans of the typical American, as home equity disappeared and hard-won stock market gains turned into losses in a single year's time.

Since then, though, the stock market has rebounded sharply, and recessionary conditions have given way to an economic recovery that has sent more people back to work. As a result, most workers are more confident than they've been in years about their prospects for retirement, according to the recent 2015 Retirement Confidence Survey from the Employee Benefits Research Institute.

Social Security may be your largest or one of your largest assets. How you manage it, by deciding which benefits to collect and when, can make an absolutely huge difference to your lifetime benefits. And those with the highest past covered earnings have the most to gain from maximizing their Social Security.

The Pew Research Center in a new study found an additional 31% of Americans expect benefits at reduced levels and 41% think they won’t receive any benefits at all.

“If government benefits are reduced or not available, future retirees will need to rely even more heavily on their own personal savings,” Pew said in the report, which uses parallel surveys in the U.S., Germany and Italy to look at how families are adjusting to rapidly changing demographics.

Pension reforms including the conversion of defined-benefit (DB) pension plans into defined-contribution (DC) plans are increasing the gap between rich and poor, according to a report by the National Conference on Public Employee Retirement Systems.

The report identifies the conversion trend as a “negative change” at both the national and state levels. In addition, negative changes at the state level have included cuts in benefits and increases in employee contributions.

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Want More Information About HB 1134?

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The legislative session ended on May 15th and the General Assembly did not pass the health insurance incentive legislation. Read the 2015 legislative summary on our website for more information.   

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Friday Top 5: Retirement Related News for 5/15/2015

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From The Best Age for YOU to Retire

You may be trying to figure out what the most beneficial age is to say goodbye to your colleagues at the office. This is one of the most important and challenging decisions you’ll make in your life. When you decide to retire affects not only you, but it could have serious, long-lasting consequences for your family members, too. The answer is not the same for everybody, and I’m going to share some information that can help you make an informed decision based on your own personal situation.

From a Social Security standpoint, you can start getting lower benefits as early as age 62, or you can delay retirement up to age 70 for your maximum monthly benefit amount.

From Huffington Post: Making the Economy Work for the Many, Not the Few -- Step 3: Expand Social Security

America is on the cusp of a retirement crisis. Millions of Americans are already in danger of not being able to maintain their standard of living in retirement, and the problem is getting worse.

You hear a lot about how corporations are struggling to make good on their pension promises, and how Social Security won't be there for you in retirement.

Baloney on both counts.

From LifeHealthPro: Fix retirement by enrolling every worker in a savings plan

(Bloomberg View) -- America's middle-class workers have plenty to worry about -- but for many, the biggest anxiety is what happens when they are workers no longer. Many will reach retirement only to find they have saved too little to live comfortably. Some will choose to postpone their retirement; others may not have that option.

The rapid and near-total disappearance of defined-benefit pensions has left many U.S. workers unprepared. Almost one-third of all workers have no savings at all. Those who do save don't save much. Median household retirement savings for people aged 55 to 64 in 2013 amounted to $14,500. Consider that the average 65-year-old in the U.S. can expect to live almost 20 more years.

From Employee Benefit News: Washington event puts spotlight on retirement woes

Although an important aspect of retirement, Social Security is just the backbone on which defined benefit and defined contribution plans should build upon, said several experts and lawmakers Tuesday.

Today’s new retirement landscape offers tremendous opportunities, but complexities as well, said Jason Furman, chairman of the White House Council of Economic Advisors. And President Barack Obama’s administration has been honing in on some of those complexities by focusing on several new policies.

From Retirement games - Workers resist new system

An effort to fundamentally change the state worker pension system has fierce ideological support in the Nevada Legislature but is facing equally fierce opposition.

Washoe Republican Assemblymember Randy Kirner said his Assembly Bill 190 deals with the unfunded liabilities of the Public Employees Retirement System (PERS). But it goes well beyond that, undertaking changes that are not needed to solve the funding. Those changes would likely result in smaller pensions for state workers.
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Friday Top 5: Retirement Related News for 5/8/2015

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From Employee Benefit News: Interest Rate Liability Important to Retirement Conversation

As U.S. employers move away from defined benefit pension plans in favor of self-directed retirement accounts, workers have become responsible for their own investment and longevity risk in retirement – something they've never had to deal with before and don’t understand very well.

One thing most people don’t realize is that retirement savings are affected by the rise and fall of interest rates and that just because your assets may be going up doesn't mean you will have more buying power in the future.

From Oregon Business: Public Employee Pension Cuts Deemed Unconstitutional

The Oregon Supreme Court decided Thursday that some of the PERS cuts for state employees were unconstitutional.

The decision brings forth uncertainty on how the state will move forward.

Gov. Kate Brown announced her intentions to review "the ruling and assessing next steps, including the short and long term fiscal needs of PERS. And I will be working with the PERS Board to determine what next steps they will take."

From The News Tribune: Reserve, Guard Retirement Choices in Sharper Focus

Many current Reserve and National Guard members, particularly those who are younger and have fewer years of service, are likely next year to face a difficult choice of retirement plans.

It will be a decision as complex as the one being prepared by Congress for their active duty counterparts. More details of that choice are emerging as architects of the new plan answer questions posed by military associations, veterans groups, congressional staffs and individual reservists

From Employee Benefit News: Today's Employees Concede Working Longer Will Help Fund Their Retirement

The traditional model for funding a life after 65 has radically changed, as workers scramble to find other sources of retirement income besides pensions, 401(k)s and Social Security – and look to a longer stay in the workplace as a way of propping up their finances in their golden years.

"Today's workers recognize they need to save and self-fund a greater portion of their retirement income," said Catherine Collinson, president of Transamerica Center for Retirement Studies. "In response, they are transforming the United States retirement system from a three-legged stool into a table by creating a fourth leg: working."

From Main Street: Here Are Some Lessons That Have Smart Savers, Spenders Celebrating Their Mom

It's Mother's Day, and high time to celebrate the moms that provide love, support and money management skills.

In a survey asking people's biggest household influence on money matters, mom ranks just ahead of dads and spouses (although behind "self-sufficient" survey respondents).
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Are Member Contributions Mandatory?

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I have heard that there is no way to stop paying into my retirement and collect what put into it until I terminate my employment. Is there a way to stop putting money into the retirement plan, and or take the my money out of it?
No, the 4% contribution of gross pay towards your defined benefit is mandatory for all MSEP 2011 members.
If you leave state employment before becoming eligible for normal retirement, you may request a refund of your contributions. If you aren’t planning to return to work for the state, your options are:
  • Rollover the total amount of your contributions plus interest into an IRA or qualified retirement plan.*
  • Elect a combination rollover and cash payment (less applicable mandatory withholdings and IRS penalties).*
  • Request a full refund (less applicable mandatory withholdings and IRS penalties).*
Please see the Member Contributions (MSEP 2011) brochure on our website for more information.

Also, please note that a refund will not be processed  until the Request for Refund of Contributions Application is completed and returned to MOSERS. Refunds will be paid 90 days from the date of termination of employment or the request for refund, whichever is later and will include all contributions you paid to MOSERS. The refund of contributions becomes irrevocable on the day that MOSERS mails or electronically transfers payment.

If you have made contributions to MOSERS, leave state employment, but think you may return to work at some point in the future, you don’t have to request a refund. If you return to a job covered by MOSERS and you left your contributions intact, your previous service credit will be combined with your new service credit to qualify for retirement. You will resume making member contributions.

* Please Note - By receiving a refund, terminated members forfeit all their credited service and any future rights to receive any retirement and long-term disability benefits, and rights to coverage through Missouri Consolidated Health Care Plan (MCHCP) other than as a dependent under provisions of COBRA.

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Friday Top Five: Retirement Related News for 5/1/15

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American Prospect: Senior Class: America's Unequal Retirement

Inequality has been increasing in multiple ways. But one little-appreciated form is the inequality of retirement time. That’s the number of years between retirement and death. It’s not surprising that divergent retirement time should reflect other forms of growing inequality. The poor have lower earnings and often work longer out of necessity, not choice. They are less likely to have decent pensions or private savings. On average, they suffer poorer health and tend to die younger. On all counts, the affluent get to enjoy more years of retirement in relative comfort.

This is just what one would expect in a market economy of rising inequality. What is surprising, however, is that there was once a broadly equal distribution of retirement time across divisions of class and race. This greater equality was a product of several egalitarian policies and institutions created in the mid-20th century, all of which are now under assault—Social Security, Medicare, pension plans, and disability policy. Thanks to these measures, as recently as the 1980s, low-income people who spent roughly the same number of years in the workforce as high-income people obtained approximately the same years of retirement.

From Gallup: Americans Settling on Older Retirement Age

Nearly four in 10 nonretired Americans, 37%, expect to retire after age 65. This percentage is consistent with recent years, but it is up from 31% in 2009 and nearly three times the 14% who said this in 1995. Thirty-two percent expect to retire before age 65; this is the first time this figure has topped 30% since 2009, but it is still down considerably from the 49% in 1995 who said that they expected to retire before age 65.

From MarketWatch: 4 rules for retirement investing in turbulent times

The other day I heard a woman describe her adventure down a white water river trip in Colorado and its harrowing rapids.
It began with a set of four rules from the guide:
  • Always stay in the boat.
  • You must wear a life jacket.
  • Hang on with both hands.
  • Remember rule No. 1.
Those who navigate retirement successfully must observe similar rules.
We live in a time when our financial resources have lots of turbulence and we experience many unpredicted events in our lives.

From Forbes: How To Save For Both College And Retirement

What’s the best way to save for your child’s college education and your retirement at the same time — and is it even possible?

The conundrum came to my attention recently during a PBS NewsHour Twitter chat on women over 50 and money that I participated in, along with Next Avenue Assistant Managing Editor Richard Eisenberg and Women’s Institute for a Secure Retirement (WISER) President Cindy Hounsell.

Related: Make the MOST of College Savings

From Fox Business: The Cost of ‘Not Yet’ Saving for Retirement

Retirement feels like a lifetime away when you are in your 20s, but that is exactly when you should start thinking about your golden years. As an investor, the long haul is the greatest advantage one can have to a more comfortable retirement than someone who waits until their 30s or 40s to start saving.

According to a recent study by Edward Jones, almost half (45%) of non-retired Americans are not currently saving for retirement. Of those who are not yet saving, only 36% plan to do so in the future and almost 10% say they never plan on saving for retirement.
Related: It Pays to Save

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