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View retired Americans of middle age as Old School

Posted by Unknown Sunday, February 3, 2013 0 comments

View retired Americans to mature as Old School people Americans increasingly view the concept of retirement than spending, according to a new report by hearts & wallets, one retired and research undertaken.

More than half (55%) say 65 53-year-old American, they plan to continue to work full time so that their State of health allows, up to 51% last year. And among workers full time more than 65, 46% plan to continue to work full-time and 41% at least part-time, Laura Varas, Director of hearts & wallets, said in a telephone interview.

What we re seeing in focus groups, she said, is that for many Americans of middle age he doesn t feel smart for his retirement.

Mature Americans also have higher levels of anxiety of investors than other age groups, the study found. In mid-2012, 42% of investors age 45-54 reported moderate anxiety to high with only 30% feeling safe. The stems of the anxiety of the fragile US economy, the financial crisis in Europe and the trading automated, where investors feel distort stock prices, according to Varas. Investors question if actions reflect the fundamental value of the company, she said.

The report, which covered 40 years 60 Americans, found that investors are unable to tell the difference between the brokerage firms of full-service such as Merrill Lynch companies autonomous such as Scottrade, perceiving them as identical in terms of price, service and quality products. For example, they gave a high note fidelity and Vanguard and fidelity as the service provider, even if the company is primarily a self-service.

In the study, Fidelity is perceived as having the better quality than Merrill Lynch, in part because of the loyalty s online services, Chris Brown, Director of wallets & heart, said in a statement. It would have been unthinkable five or 10 years.

The study showed that middle-age Americans want personal advisors as well as online tools. He found investors to mature like to use online tools to perform initial research and review their investment with advisors and research strategies. Middle-aged investors tell us they want both, they need both, they both require, Varas said. Both, says, go together like the peanut butter and jelly.

The report, which is based on the nine groups of discussion that is held in Boston, Chicago and Los Angeles from September 10, 17, relies on the quantitative survey annual closed s in addition of 5,400 U.S. households.

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Advisors & TPAs: Don't Miss the NAPA/ASPPA 401(k) SUMMIT 2013!

Posted by Unknown Saturday, February 2, 2013 0 comments

By now you’ve heard of NAPA—the National Association of Plan Advisors—a new organization created by, for, and led by retirement plan advisors.

The truth is, NAPA was born out of necessity. The debates over a uniform fiduciary standard and the definition of investment advice under ERISA proved that policymakers in Washington have little understanding of what you do. And given the economy’s uncertainty and the debate about the future of 401(k) plans, it’s critical that advisors have a strong voice in Washington.

That’s where NAPA comes in. We’re developing a powerful grass roots and grass tops program that will enable advisors to clearly be heard on Capitol Hill. Plus, NAPA will have ASPPA’s political clout and expertise behind it every step of the way.

Beyond advocacy, NAPA also provides outstanding educational opportunities to advisors through ASPPA and TRAU. TRAU is The Retirement Advisor University—it’s part of UCLA and is run by industry veteran Fred Barstein. As a member of NAPA, you’ll have the opportunity to become more knowledgeable and more valuable to your clients and prospects.

Bottom line—NAPA’s mission is to represent retirement plan advisors—to be a leader in the evolution of the national retirement system to improve transparency, effectiveness, and governance—in an effort to improve the retirement outcome for participants. For more information and to join, visit www.asppa.org/napa.

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Advisors & TPAs: Don't miss the 401 (k) NAPA/ASPPA Summit 2013!

Posted by Unknown Friday, February 1, 2013 0 comments

By now you’ve heard of NAPA—the National Association of Plan Advisors—a new organization created by, for, and led by retirement plan advisors.

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[Opinion] What 30 Years of 401(k) Mistakes Teach Us

Posted by Unknown Thursday, January 31, 2013 0 comments

Stace Hilbrant, recently named Plansponsor’s 2012 Retirement Plan Advisor of the Year, is Managing Director and Founder of Chicago-based 401k Advisors, LLC. Since 2001, Hilbrant and his associates have assisted plan sponsors of 401k plans of all sizes. The firm represents small to mid-sized companies from manufacturers to printing companies and professional sports teams to firms engaged in the automotive and aerospace industries and has over $1.2 billion in assets under management.

Stace has been in the financial industry for more than 30 years, including 20 years with one of the 401k industry leading service providers. Stace, is a Registered Investment Advisor and holds Series 6, 63, 7, 24 and Series 65 designations. He is also an Accredited Investment Fiduciary (AIF), a Plansponsor Retirement Professional, and Registered Fiduciary (DALBAR). Stace’s expertise ranges from employee education and investment due diligence/asset allocation to vendor reviews /cost management and fiduciary liability management.

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I've been in the retirement plan industry since 1981, more than 30 years! I started my career with one of the industry's leading providers and record keepers for corporate defined benefit "pension" plans, like your grandfather had when he retired from working for the railroad for 50 years.

In the early 80s, as we watched companies by the dozens start freezing and terminating these "pension" plans, it became clear to most of us that the newly minted "401(k) plans" were going to become the sole vehicle that the industry would count on to provide retirement security for millions of Americans.

401(k) plans have since become the single largest financial asset most average working class Americans will ever have, and, they're the most mismanaged. Although there have been dozens of mistakes, here are the most critical mistakes we've all made and what can be done to reinvent these savings vehicles, to create a new generation of Americans who can be properly prepared for their long awaited retirement years.

Less than 42% of Working Americans have ever attempted to estimate how much money they will need to last during the 20-30 years they may live after they turn 65 and stop working full time (commonly referred to as “retirement”)
2007 Employee Benefit Research Institute Study

Every American who has access to a 401(k) plan, IRA program, etc. should use any tool available to estimate how much money will be needed (including medical care costs & expenses), and put a strategy in place to save more if they're drastically underprepared now (hint: there is general agreement that the percent of American workers who are underprepared is somewhere near 95%, depending on what your definition of "prepared" is). See: MarketWatch’s new Retirement Planner

Solution: Don't waste another weekend without taking the time to calculate what you will need in terms of retirement income during the 20-30 years you will likely live in retirement and compare that estimate with what assets/retirement income you will likely have in retirement and make any necessary lifestyle changes immediately!

We Americans are great spenders and terrible savers.

You can tell what great spenders we are by paying attention to how many people are lined up for days on end outside the local Apple store to get the latest version of the iPhone or iPad. Americans are more interested in watching "Dancing with the Stars" or what Kim Kardashian is wearing at some Hollywood dance club than they are in spending 10 minutes reviewing what their retirement years will look like. My industry experience tells me that most Americans have virtually given up worrying about what their retirement futures hold for them, the problem of being poorly prepared for retirement is just too grim.

Solution: Become very, very good at living "beneath " your means. Suzy Orman and Dave Ramsey's main messages in recent years have shifted from living "within your means" to living "beneath your means."

There is a huge difference between the two. Figure out immediately how to solve this dilemma for your own family! If you are financial challenged and can't buy Suzy Orman or Dave Ramsey books, go to the library (at no cost) and study their websites and other financial/home finance blogs for hundreds of great, life changing financial ideas, including "eating beans and rice" until you pay off your high interest credit card balances and become debt free and becoming able to save properly for retirement.

Most of us should be deferring/saving between 10% and 15% of earnings to be able to retire and live on 75%-80% of the income we were earning when we turned 65.

Exceptions to this statement include situations where your parents/grandparents or rich uncle passed away and left you millions of dollars (good for you!). However, most American's don't inherit anything and save just a fraction of the amount necessary to afford themselves sufficient income in retirement to live comfortably. This is especially true when considering the tens of thousands of dollars that medical insurance and out of pocket costs add to this equation (Putnam Investments leads the industry in the research they've done in this area). Putnam Investments estimates these costs in retirement years to be in excess of $150,000.

Learn everything you can about diversifying your investments and seeking low cost investments!

Most investment and insurance companies, financial blogs and websites have tons of great free information about how to create diversified investment portfolios and how to find and utilize low cost investments. Chasing past investment performance, having only a few stocks, or leaving your assets in a money-market account are just a few of the hair brained mistakes most people make when they simply don't know what to do with their money.

Solution: I'm a big fan of you learning everything you can about saving and investing, you then don't have to pay a broker 1% commission off the top to get his/her "assistance." You are also less likely to be sold products or services that may not be in your financial best interest if you did the homework yourself! Have you ever noticed how many celebrities or millionaire professional athletes end up declaring bankruptcy?

We need to realize that our Government cannot solve this crisis of retirement readiness.

With increased stress being placed every year on the Social Security system, we will likely see some sort of change for future retirees, that's just a reality. Senator Tom Harkin recently proposed a plan to change how Americans save for retirement. The fact is, 401(k) plans work just fine if they are managed properly and Americans participate sufficiently.

Solution: If you're a participant in a 401(k) plan, make sure you're saving enough to be 100% prepared, in other words, to be "retirement ready." Encourage your employer to add low cost investment options to the program. If you have an "adviser" now, make sure he/she is available to you and your co-workers to provide advice, guidance and retirement income projections. If they're not accessible, encourage your boss to replace them with someone who is available to everyone, regardless their status in the company or level of pay! Most fees and commissions come out of your account, remember, advisers should be working for you!

I encourage everyone I speak with to become the champion of their own "retirement readiness." Don't wait another month! You cannot rely on government for a confident retirement and you must learn how to make saving for retirement the most important aspect of your financial life.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial adviser prior to investing.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Financial Partners, a registered investment adviser and separate entity from LPL Financial.

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What's the Price of Retirement Confidence?

Posted by Unknown Tuesday, January 29, 2013 0 comments

What’s the Price of Retirement Confidence? Americans Who Have $250,000 or More in Investable Assets, a Wells Fargo Study Finds
The 401(k), Social Security and Role of Individuals
About half of all Americans surveyed view the 401(k) as the best retirement savings vehicle when asked to select from a list of options (52% among affluent; 49% among those with less than $250,000 in assets). Not surprisingly, affluent Americans contribute a higher percentage of their salary (median=12%) to their 401k plan than those with less than $250,000 in assets (median=7%).

Additionally, affluent Americans expect Social Security to play a smaller role in their retirement than those with less than $250,000 in assets , who expect Social Security to cover a higher median percentage of their monthly retirement income (median=20% compared to 25%). However, both groups have similar expectations on the following: When asked to assign a proportion of responsibility for funding their retirement, the majority (50%) assigned responsibility to the individual through saving and investment, followed by the employer though a pension (25%) and by the government through Social Security (20% by the affluent and 25% for those with less than $250,000 in assets).They expect to begin taking Social Security payments at the median age of 65. Similarly among those not retired, majorities of affluent (78%) and those with less than $250,000 in assets, (71%) believe they will have the option of delaying the age at which they begin taking Social Security so that they’ll receive higher payments.Majorities of the affluent (54%) and those with less than $250,000 in assets (61%) are not willing to take a reduction in their Social Security and/or Medicare benefits even if it would help the country head towards a path to reduce its debt burden. Affluent women (45%) are more likely to be willing to take a reduction in their Social Security and/or Medicare benefits than women with less than $250,000 in assets (30%), but there is no such difference among the men in both groups (36/37%). About the Survey
On behalf of Wells Fargo, Harris Interactive Inc. conducted 1,800 telephone interviews among those aged 25-75 focusing on attitudes and behaviors around planning, saving and investing for retirement. Harris conducted 400 interviews among those with $250,000 or more in investable assets and 400 interviews among those with $100,000 to less than $250,000 in investable assets. The remaining 1,000 interviews were conducted among those who fell within specific income and wealth brackets (those aged 25 to 29 had 2011 household income of $25,000 to $99,999 and household investable assets of $99,999 or less and those aged 30 to 75 had 2011 household income of $50,000 to $99,999 or household investable assets of $25,000 to $99,999). Among the working affluent close to two-thirds (61%) had 2011 household income of less than $150,000. In comparison, 92% of those with less than $250,000 in investable assets who are not retired had 2011 household incomes of less than $150,000. The survey was conducted July 9 – Sept. 7, 2012.

Data were weighted as needed to represent the population of those meeting the qualification criteria. Figures for education, age, gender, race/ethnicity, region, household income, investable assets, number of adults in the household, and number of phone lines (to adjust for probability of selection) were weighted where necessary to bring them in line with their actual proportions in the population.

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The 401(k) Paper Chase: AARP Fights for Continued Use of Hard-Copy Participant Communication

Posted by Unknown Monday, January 28, 2013 0 comments

Ever wonder why the retirement advisor community, the Department of Labor and the AARP never seem to see eye to eye?

While the animosity between the industry and the Feds is one thing, the seemingly benign and pro-retiree AARP continues to build a divide between the public and retirement professionals - and a new study seems to reiterate one particularly burdensome sticking point.

According to the AARP's "Paper by Choice" research survey, people of all ages - seniors in particular - are said to prefer receiving all of their retirement plan information in paper form in the mail, rather than in an electronic fashion.

The AARP says it polled more than 1,000 consumers aged 25 and over and found that the overwhelming majority prefer to get their retirement plan documents in paper form, even those who do have computer access, email addresses and admit that they spend a considerable amount of time online every day. So the AARP continues to push for paper first, electronic as a secondary and less warranted option.

"AARP has long had concerns about this approach, and our new survey indicates that the public shares those views," says Cristina Martin Firvida, AARP's director of financial security issues. "Retirement plan participants of all ages overwhelmingly prefer a policy that requires documents to be delivered in paper form, with an option to choose electronic delivery, rather than the other way around."

With yesterday's latest round of fee disclosures currently in the mail and most in the industry adamant that the extra paperwork is not only expensive but mostly ends up being discarded by recipients, the survey data demonstrates just part of the considerable divide that exists between the three parties - not to mention the overburdened consumer population.

Throughout the year, members of the retirement industry have continued to try to press the DOL to markedly simplify (and drastically reduce the costs of) the fee disclosure process by allowing electronic distribution of the multiple statements, warnings of statements, notices of changes and notices of updates that plan participants are now receiving.

I know personally I got about a dozen mailings from my own plan administrator, most of which were single page letters warning me that I was going to be getting more mailings. You know where they all ended up. (Even better, I also printed out all 14 pages of the AARP report, just to further create work for my recycling contractor.)

Earlier this year, the crowd at the spring ASPPA gathering posed that very question to the DOL's second-in-charge, Michael Davis - who's now jumped ship and returned to the private sector - and he suggested that concerns about seniors' (and participants in general) lack of access to the Internet meant that the heaping mounds of paper were going to be the norm.

That's resulted in single mailings that cost plan sponsors hundreds of thousands of dollars, and aren't resulting in particularly engaged, involved, upset or even interested participants.

This seems a little odd considering I read earlier in the week that there will soon be more smartphones out there than people, and that the saturation of electronic media, even among seniors, continues to grow.

Rather than putting the onus on more and more mailings - as high-minded a concept as it may be for your grandmother to collect more junk mail - it seems strange that the AARP has continued to bang away at this subject, rather than the great, dark secret of the whole fee disclosure debacle: the sticky detail of plan expenses.

Those plan expenses, as many critics have noted, aren't really made any clearer despite this mountain of fee disclosure paper. I recently spoke with Greg Carpenter, founder of Employee Fiduciary, a small business 401(k) administrator, who agreed that lack of clarity on plan expenses and share classes - whether a conscious decision on the part of the industry, or not - are probably a more important topic for advocates to tackle.

"In my opinion, the big guys lobbied enough not to have to show any indirect payments and they also don't need to disclose the share classes, as they said that would just confuse the overburdened investor," he said.

That share class information, he argues, also adds some value to your role as a retirement advisor and intermediary between those providers and their investments and the plan sponsors, all of whom may be slighly obfuscating the details.

"If an advisor is prepared, you can show a participant the details. Is it institutional? Does the distribution company get some amount of money for each share class? That becomes really important, and then you can unpack the details and show how much the participant is really paying in fees."

Ultimately, he agrees that clarity is important, not matter whether it comes in a pile of paper or in the form of an email - and interpretation is key to keeping your participant investors happy and involved.

"I think participants should also demand to see information at the plan sponsor fee disclosure level, and I don't see any reason that a plan sponsor wouldn't do that. If you're proud of your fees being so appropriate, why aren't you disclosing them?"

Next » Page 1 of 2 Related Articles Is a December 401(k) match really a present? Top-ranked 401(k)s take fees into consideration Hostess diverted workers' pension funds, company admits DOL to offer new version of fiduciary rule ‘in several months’ Aging global workforce set to tap DB plan reserves Previous 3 ways to take advantage of still-low tax rates Next At no cost to you? Related Terms Strategies 1451 Products 1040 Practice Management 878 AARP 34 Michael Davis 10 electronic media 6 Cristina Martin Firvida 2 Employee Fiduciary 2 Greg Carpenter 2 Comments /* * * CONFIGURATION VARIABLES: EDIT BEFORE PASTING INTO YOUR WEBPAGE * * */ var disqus_shortname = 'benefitspro'; // required: replace example with your forum shortname // The following are highly recommended additional parameters. Remove the slashes in front to use. var disqus_identifier = '50a52449150ba0d6090000e3'; var disqus_url = 'http://www.benefitspro.com/2012/11/15/old-school-the-401k-paper-chase'; var disqus_title = 'Old school: The 401(k) paper chase'; /* * * DON'T EDIT BELOW THIS LINE * * */ (function() { var dsq = document.createElement('script'); dsq.type = 'text/javascript'; dsq.async = true; dsq.src = 'http://' + disqus_shortname + '.disqus.com/embed.js'; (document.getElementsByTagName('head')[0] || document.getElementsByTagName('body')[0]).appendChild(dsq); })(); OAS_RICH('Right1'); Sponsor Showcase Smarter Benefits Investing

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Majority of Women Financially Unprepared for Retirement

Posted by Unknown Sunday, January 27, 2013 0 comments

Majority of Women Financially Unprepared for Retirement (Financial Planning)

"Approximately 58 percent of single women over the age of 45 who have any kind of savings or retirement account have less than $50,000 saved, while only 22 percent have more than $100,000 saved. At the same time, these women are aware of their need to step up their savings efforts, as only 5 percent of 45-54-year-old women and 16 percent of 55-64-year-old women believe they are saving enough for their twilight years."

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BenefitsLink ® (BenefitsLink.com) provides this page for you, with a hypertext link to an item we think is interesting and valuable for companies sponsoring employee benefit plans, employees who participate in plans, and firms who provide products and services to plans. But BenefitsLink is not the author of the item to which this hypertext link will take you (unless expressly indicated there).

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Info Zone

View retired Americans of middle age as Old School

Advisors & TPAs: Don't Miss the NAPA/ASPPA 401(k) SUMMIT 2013!

Advisors & TPAs: Don't miss the 401 (k) NAPA/ASPPA Summit 2013!

[Opinion] What 30 Years of 401(k) Mistakes Teach Us

What's the Price of Retirement Confidence?

The 401(k) Paper Chase: AARP Fights for Continued Use of Hard-Copy Participant Communication

Majority of Women Financially Unprepared for Retirement

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