10. Current State Existing 401(k) Balances May Be Inadequate Source: Average 401(k) balances for 20 million 401(k) participants, 12/312006. EBRI Issue Brief #308 Tenure in Years $190,593 $157,069 $93,636 $51,268 $31,914 60s $167,806 $174,272 $99,794 $54,491 $32,532 50s 30+ 20 - 30 10 - 20 5 - 10 2 - 5 Age Group
11. Current State Defined Benefit Plan Participation Has Fallen Dramatically in Private Sector % of workforce participation by plan type Source: Center for Retirement Research at Boston College
12. Retiree Medical Coverage Drops in Private Sector Source: The Kaiser Family Foundation, 2006 Employer Health Benefits % Employers offering coverage
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15. Amount Respondents Say Needed for Comfortable Retirement source: EBRI 2008 Retirement Confidence Survey 18% $1 million or more 23% $500,000 - $999,999 16% $250,000 - $499,999 25% Under $250,000 12% Don’t know
16. Methods for Determining Savings Needed for Retirement source: EBRI 2008 Retirement Confidence Survey 4% Other 2% Desired lifestyle 4% Worksheet or form 7% Online calculator 9% Read or hear amount 19% Do own estimate 19% Ask advisor 43% Guess
Been writing and speaking 15 yrs. Lots of ee meetings, good and bad. Unbiased, trusted source of info. Not selling - cures for baldness. Full time mission now. Book 2005 Subtitle says it all. 400 pages, lots of detail.
2007 produced DVD. Boil down to simple strategies. Life turn out ok Visual very compelling and memorable. Booklet action steps. 12 experts. 13 people. Got it covered between books, DVDs, new series of email newsletters.
Topic of interest to audience in their role as leaders and examples Not narrowly defined fiduciary role to administer and operate benefit plans, which is also very important and is the subject of much of the conference. We face some serious challenges, and we want to speak clearly and plainly about these challenges. Focus on important key messages. Will talk about most of America - private sector, public sector, multiemployer. Realize that most in the audience represent multi or public plans, and will point out the differences. Also need to plans you represent into greater context of Soc Sec and what’s happening in other sectors, since your plan members may come from another sector or be married to someone there
Made this stmt before meltdown - even worse now First point IN SPITE OF fine efforts of audience, not BECAUSE they are doing inadequate job Praise for their efforts, particularly if sponsor DB and/or retiree medical plans This is predictable surprise. Show of hands - how many aren’t too surprised at mortgage meltdown, given practices from a few years ago?
Professional statement vs. This is stupid! And people were upset about $700 billion bailout, which was about $2,300 per citizen
Retirement plan of any type. Stats similar for 45-54 age group, lower for younger age groups And must stay in plan for a career to get meaningful benefits
Implications: liquid assets inadequate Need good choices for DB plans, if available. No lump sums! Tempted to use home equity to fund retirement - if still available! Stock prices and real estate values have eroded since 2004.
Balances have eroded significantly since 2006.
Of those participating in a plan Multi and public sector different, change not nearly as profound. Source from US Census Bureau Don’t confuse with % of employers sponsoring How many multis feeling pressure from employers to W/D from DB? How many governments feeling pressure from legislators?
Also add employees covered if time
%’s don’t add to 100 This was in survey If have pension, maybe they’re right. If no pension need at least $500,000 for traditional retirement. Half are wrong.
%’s don’t add to 100 This was in survey
Outliving assets polite way of saying : Broke not dead yet
We’re living longer
65 year-olds are much better to work today than 60 years ago
Causation vs correlation. Engagement in life, powerful reasons getting up morning. Poverty level. Questions traditional retirement
Patti’s slides follow
401k balance not there to spend in retirement! Generator of I
401k balance not there to spend in retirement! Generator of I
One spouse earns maximum all career, spouse gets spousal benefit
One spouse earns maximum all career, spouse gets spousal benefit
Power of delaying Type of analysis should do - gets in ballpark. Spreadsheets, online, advisors better. Rethink expenses - how bad want to retire? DB plan or work close gap.
One spouse earns maximum all career, spouse gets spousal benefit
One spouse earns maximum all career, spouse gets spousal benefit
One spouse earns maximum all career, spouse gets spousal benefit
Given recent events in financial markets, does it really make sense to rely just on financial resources and promises by others for a period of 20, 30 or even 40 years? Maybe some form of work, particularly in ‘early’ retirement years, is a good strategy.
May be more feasible for most Americans May be necessary given prior slide But do they jeopardize new goals in prior slide?
Audience show of hands - how many doing something about these issues?
Audience show of hands - how many doing this?
Note success of other public education efforts - drunk driving, smoking If feasible, have discussion on what has worked for audience.
Emphasize fine line between providing information and advice
Productivity issue. Primarily issue of expectations. Grumpy old men and women if expectations not met. It’s the right thing to do for your employees. Given recent events in financial markets, does it really make sense to rely just on financial resources and promises by others for a period of 20, 30 or even 40 years? Maybe some form of work, particularly in ‘early’ retirement years, is a good strategy.
Fine line between advice and education - go to the line. Good time to be aging. Need to share info. BS detectors up. Want to hear vs need to hear. If can’t retire, fix work so that can continue working and live fulfilled life.
Learn more! Email Newsletter OK to take time learning projection systems Speaking of being student, quiz and newsletter in package. Books and DVDs for sale. Q&A if time - LTC
