Financial planning

Employers and their employees hold different perspectives on how to best achieve retirement preparedness through 401(k) plans, according to the results of two newly released studies from Schwab Retirement Plan Services. Taken together, the studies indicate that, despite efforts by employers to educate workers on the 401(k) offering, most workers are unengaged and financially unprepared for retirement. CFO Research Services, on behalf of Schwab, surveyed more than 200 senior finance and human resources executives from large and midsized U.S. companies about their perceptions of 401(k) plans in the workplace. Key findings include:

Paralyzed both by fears about the economy and long-known saving malaise, workers still aren't saving adequately for retirement. They're aware that their fear and inertia are harming their retirement futures, but feel powerless to stop the damage.

It may be a no-brainer, but savings behavior continues to be a critical factor in ensuring retirement preparedness. This is according to new research by the Putnam Lifetime Income Score, a survey of 4,000 working Americans. With U.S. households presently on track to replace 65% of their current income in retirement, a slight uptick from the June 2011 report, those best positioned for success have access to workplace savings plans, and proceed to defer 10% or more of their income.

This summer, thousands of employees will be improving their financial knowledge and pitting their know-how against others in the first Employee Benefit News Financial Fitness Challenge

Workers, shaken by the realities of the Great Recession, have adjusted their visions of retirement according to the 13th Annual Transamerica Retirement Survey released this week 3,600 American workers. It found that the majority of workers plan to work past age 65 (56%) and the majority (54%) plan to continue working after they retire. Despite workers' demonstrated commitment to saving, just 39% believe they are building a sufficient nest egg, thereby underscoring the need to redefine "retirement readiness" in a way that is better suited to these new realities.

While most retirement plan participants find guaranteed income appealing, the farther the horizon to retirement, the greater the attraction, a new study from The Hartford shows.

Employers and their employees hold different perspectives on how to best achieve retirement preparedness through 401(k) plans, according to the results of two newly released studies from Schwab Retirement Plan Services. Taken together, the studies indicate that, despite efforts by employers to educate workers on the 401(k) offering, most workers are unengaged and financially unprepared for retirement.

A 65-year-old couple retiring in 2012 is estimated to need $240,000 to cover medical expenses throughout retirement, according to the latest retiree health care costs estimate calculated by Fidelity Investments. This represents a 4% increase from last year, when the estimate was $230,000.

Women may have advanced academically and up the career ladder, but there is still a ways to go in terms of retirement readiness. A new study from ING Retirement Research Institute shows that on average, women have $41,000 less saved than men over the course of a lifetime. For women with children, that gap expands to $61,000.

Creating an adequate amount of income for individuals to live comfortably in retirement will require a combination of several income producing strategies, as well as knowing what constitutes realistic and "safe" withdrawal rates from retirement plans, according to a recent issue brief by the Institutional Retirement Income Council.

Aging baby boomers got some jolting news on Monday when the U.S. government said the Social Security retirement program is on track to go bankrupt three years earlier than expected if reforms are not made.

Usually, when people talk about someone "going through a stage" they are talking about a toddler or a teen. But there's another age at which people go through a key transitional period, also marked by angst and rebellion: Call it pre-retirement.

Working Americans households probably will experience a potential income drop of 28% in retirement, and 38% retiree households report not having sufficient enough income to cover monthly expenses. This is according to new research from Fidelity today that shows retirement income gaps could force significant sacrifices among workers retiring tomorrow and in 50 years.

Young people plan on working well into retirement — not necessarily due to financial need, but because they want to stay active and involved. This is according to new survey results from T. Rowe Price, showing that 69% of respondents between the ages of 21 and 50 plan to work either part-time or full-time during their retirement years. Among those who plan to work at least part-time, most (75%) will do so because they want to stay active and involved; only 23% believe they will do so because they will not have saved enough money.

Most American investors mistakenly believe that target-date funds provide guaranteed income in retirement, among other misconceptions of how the instruments work, the SEC found in a recent investor survey.

Continued economic uncertainty has led all workers to dip into their retirement savings, but minorities have been the hardest hit, according to a new study from Ariel Education Initiative (a nonprofit affiliate of Ariel Investments) and Aon Hewitt. Compared to their Asian and white counterparts, African-American and Hispanic employees are eroding their retirement savings at an alarming rate.

While it's not trending highly on Twitter, the hashtag #rothiramovement is hot in the personal finance Twitterverse right now.

In its annual retirement confidence survey released last year, the Employee Benefit Research Institute found that 20% of workers intend to retire at a later age than they had planned. Of those who said they will retire later, the main reasons cited were the poor economy, a lack of faith in Social Security or the government, a change in employment situation or, simply, that they can't afford to retire.

Seventy may be the new 60 — but not where the Internal Revenue Service is concerned. People who turned 70-1/2 last year must begin taking required annual withdrawals from their tax-deferred retirement accounts no later than Friday, a reality many older workers weren’t aware of. Employers can help fill the education gap.

EBN Associate Editor Lisa V. Gillespie sat down with Gerald Wernette, director of retirement plan services for Rehmann Financial, to discuss multiple issues facing retirement plan sponsors today, including the obligation to provide participants with financial education and how to give those education programs tailored relevance to employees across all life circumstances.