Don’t Let Retirement Woes Cripple You, Face Them Head On

Retirement Worries: How to get rid of them

Americans are concerned about their finances in retirement – and it’s not just the lower or middle class, but also the rich.

Two new studies are out. But while they are quite different, they both point to the same thing – retirement is going to be a big problem for everybody – from the really rich to the investing class to much less you and me.

Signator Investors, a national network of independent firm of financial professionals across the U.S., conducted a survey and found that individuals have three main areas of concern:

  1. Rising health care costs
  2. Changes to Social Security and/or Medicare
  3. Running out of money in retirement

And, Matt Rigatti, vice president of Signator Investors says, “Though being able to afford healthcare isn’t a new issue, the fact that more affluent workers are very worried about it than not, points to the value advisors can provide to help clients develop strategies to manage it.”

Americans have been worried about their retirement since the recession. But now even businesses are getting involved. AON Hewitt, a global talent, retirement and health solutions business questioned 400 plan sponsors and reveals that employers are taking bold steps to help seniors ease into retirement.

“Employees know they need to save for retirement, but it’s usually not a priority and they often need some help and guidance in mapping out a path for getting there,” said Rob Austin, director of Retirement Research at Aon Hewitt. “Fortunately, employers are stepping up to the plate and strengthening their offerings in ways that will not only increase participation, but empower employees to take full advantage of the myriad investment opportunities the DC plan affords them.”

Employers are therefore taking these bold steps to help their employees:

  • Increasing their company match to the 401(k) plan.
  • Relaxing their eligibility requirements so employees can begin making pre-tax contributions immediately upon hire.
  • Broadening their Roth availability by adding Roth provisions to their plans.
  • Increasing the availability of outside investment choices and advisory services to help workers make critical decisions to save adequately for retirement.

While companies are doing what they can to help ease their workers retirement worry, there are two critical steps that you should take to ensure that you are retirement ready.

  1. Take advantage of your company’s 401(k) match policy. In fact, the survey by Aon Hewitt’s shows that nearly all employers (98 percent) provide some sort of employer contribution to their plan. The most common match they says is now $1.00 per $1.00 on the first 6 percent, up from a match of $0.50 per $1.00 on the first 6 percent. Your employer may have recently changed their 401(k) match policy so be sure to find out if your company offers a plan and at what rate.
  2. Contribute to a Roth IRA. If you don’t have a Roth IRA yet, you should consider getting one. Albeit different from a 401(k), a Roth IRA is also a very important program to partake in. According to the survey by Aon, employers have been allowing Roth contributions over the past six years and have increased from 11 percent to 50 percent. And many other companies are following suit. Find out what your company offerings are and whether they are a participant.
  3. If you want to do more to retire with cash and confidence, check out Consolidated Credit’s retirement section.

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