Tag: financial planning

Financial Planning

Retirement Assets Reach Over $19 Trillion in 2016

Per recent data shared by the Federal Reserve, retirement assets reach over $19 trillion. This data demonstrates the seriousness that people are approaching their retirement financial planning. Have a look at the numbers and see how the assets are doing when they are classified into various categories.

Retirement Benefits

Retirement Benefits Fund Assets for DB and DC Plan Also Grew

The data shared by Federal Reserve also states that retirement fund assets for Defined Benefit Plan and Defined Contribution Plans (like 401(k)s and the Federal Government’s Thrift Savings Plan) have also grown a lot in the last year. The total assets across the public and private defined contribution (DC) and defined benefit (DB) plans grew by 8 percent. It was $17.6 trillion in 2014, and retirement assets reach over $19 trillion in 2016.

Total financial assets available in private and public DB pension plans were $12.4 billion in 2016. It has increased by 8 percent as it was just 11.5 trillion in 2014. Similarly, the total financial assets in DC plans were $6.7 trillion in 2016. It is up by 10 percent from $6.1 trillion in 2014.

Private DB pension plan assets in 2014 were $3.2 trillion. They were at $3.3 trillion in 2016 which shows an increase of 3 percent. Private DC plan assets in 2014 were $5.2 trillion, and they grew by 9.6 percent in 2016 to stand at $5.7 trillion.

Pension Funds’ Biggest Asset Class Holding

When discussing the performance of retirement benefits fund assets, it is vital to consider pension funds’ largest asset class holding. The largest asset class held by pension funds was corporate equities as it was $4.8 trillion. It is closely followed by debt securities and mutual funds which stand at $3.9 trillion for both of the asset classes. The fourth biggest holding of pension funds in 2016 was Treasury Securities that stood at $2.3 trillion.

Government’s Assets

When reviewing the performance of retirement benefits fund assets, it is essential to see how the assets of the federal government have performed. The DB plan assets of the federal government were $3.4 trillion, and DC plan assets in 2016 were much less than that as they were just $466 billion. DB plan assets of state and local governments were just $5.6 trillion in 2016 while DC plan assets of state and local governments were just $490 billion.

Looking at the Flows

Debt securities were the biggest purchase of private and public DB plans in 2016 as they were around $190 billion, followed by Treasury Securities that were $120 billion and Corporate and Foreign Bonds at $61 billion.

For all the private DC plans, the highest numbers of inflows in 2016 were to mutual funds, at $24 billion. It was followed by debt securities at $22 billion and corporate and foreign bonds at $12 billion.

For the DC plans of federal government, the biggest purchasers in 2016 were debt and treasury securities as both were at $16 billion. They were followed by assets in the Thrift Savings Plan that were about $12 billion.

The biggest purchases of local and state DC plans in 2016 were unallocated insurance contracts at $8 billion and miscellaneous assets at $7 billion.


The data shared by the Federal Reserve regarding retirement benefits fund assets is a good source of information for investors who wish to understand how these large plans are investing their asset, which may lead to an understanding of how these money managers perceive the economy and the potential investment risks that lie ahead.

Firing Federal Employees Becomes Easy

Most federal employees seek to know the best date to retire so that they can do the financial planning well. But it seems that they will need to plan ahead as firing federal employees has become easy thanks to a newly approved legislation. The employees of the Veterans Affairs Department are the ones being more affected by this change. Democrats tried very hard to halt this bill which they think is unfairly targeting the rank-and-file employees.

firing federal employeesit seems that they will need to plan ahead as firing federal employees has become easy thanks to a newly approved legislation.

Legislation that Makes Firing Federal Employees Easy

The legislation that makes firing federal employees easy was approved by a House committee. It will now hasten the disciplinary process going on at the Veterans Affairs Department. This legislation was pushed back by the Democrats, and they opined that this legislation is unfairly targeting all the rank-and-file employees.

Republicans vs. Democrats

This legislation is the latest effort made by Republicans to make firing federal employees easy and boost the accountability at the VA. The Republicans have tried to expedite the firings and suspensions at the department since an initial reform effort initiated in the year 2014 ran into legal trouble. Democrats, on the other hand, insisted that they were for getting rid of problem employees in VA, but they thought that the Republicans led plan would not address the root of the issue in a proper manner.

Hurting a Few Employees

The author of VA Accountability First Act and the Chairman of the House Veterans Affairs Committee, Rep. Phil Roe, R-Tenn. started off the markup by addressing the expected criticisms. He stated that the measure was not an attack on the rights of the workers, but it was an effort to grant the request made by VA Secretary David Shulkin. Shulkin had sought to dismiss employees when he comes across very few bad employees.

Roe stated that he did not agree with the argument that the bill would impact recruiting and retention in a negative manner as bad employees usually hurt the morale of the rest of the workforce. While noting a common refrain from detractors of firing reform, Roe mentioned that the measure would not hurt a large number of veterans who work at the department.

Roe is a veteran himself, and he opined that veterans don’t agree to serve in any role because they put special employee protections ahead of a mission as the mission always comes first.

Eliminating the Grievance Process

The main sticking point of the legislation that makes firing federal employees easy was the elimination of the union grievance process that is available to all the represented employees as a way to appeal adverse personnel actions. Roe highlighted that the unions represent 76 percent of the VA workforce and his intention was to reform the process for more than just a quarter of employees of the department. Roe added that leaving the grievance process open would create a gigantic loophole for increased accountability. He also pointed out that the completion of the grievance process takes up to 350 days to complete.

Another ranking member of the committee, Rep. Tim Walz, D-Minn, stated that VA must follow the laws that were put in place after collective bargaining agreements.

The Amendments

Democrats had proposed some amendments to reform the legislation that makes firing federal employees easy, but all those efforts failed. Walz has cautioned that the latest accountability legislation would fail to pass in the Senate. He even offered a compromise bill that was championed in the Senate Veterans Affairs Committee last year and had got bipartisan support. Among the other amendments that failed, there was a plan from Rep. Mark Takano, D-Calif. He proposed allowing the VA Secretary to suspend troublesome employees without pay while an investigation into alleged misconduct was done.

Scandals of the Past

Roe did not hesitate in pointing out that anyone who was standing against this bill that makes firing federal employees easy was supporting an antiquated system that was mainly responsible for the scandals that occurred in the past.

The Expedited Removal Authority

Roe’s bill would give expedited removal authority to the VA secretary which means that any employee fired by the Secretary would be out of the job and off the rolls of the department that day. Any employee who is facing removal or suspension of at least 14 days or a demotion would get a notice of 10 days, and the secretary would have five days to rebut any response an employee comes up with during that time. Those employees would maintain appeal rights to the U.S. Court of Federal Claims and the Merit Systems Protection Board.

Reduced Pensions

Apart from making firing federal employees easier, this bill would also allow VA to reduce the pensions of employees if the employee is convicted of a felony that affected the job and it will also let VA recoup bonuses and relocation expenses in a few cases. Federal employees facing these kinds of penalties would also be entitled to an appeal so that they can retire when it is the best date to retire for them, and they can meet their financial planning goals rather than being chucked out unceremoniously.

Men and Women have a different approach to Retirement Benefits: Survey

The perception of men and women towards retirement and retirement benefits is totally different from one another. It was revealed in a report released on the basis of the Voices of Experience Survey. The survey also revealed that women plan to invest in the retirement plans at a later age and they plan to spend their retirement time by doing socializing, taking care of family and looking after their personal interests.

retirement benefitsRetirement Benefits Aspect of the Survey

The Survey was conducted by TIAA (formerly TIAA-CREF). The aim of the survey was to find out how people prepare for retirement, how soon they start investing for retirement benefits and to get an idea about the changing attitudes of people on life in retirement. The survey highlighted how men and women plan for their retirement financially and how they want to spend their retirement time.

The survey revealed that 22 percent of men started investing towards retirement benefits funds before the age of 30. Only 12 percent women did the same.

Satisfaction with Finances

The survey also revealed that men would be happier with their financial health when they retire. 58 percent men admitted to the same. Women, on the other hand, were less sure of it. About 46 percent agreed to it.

Spending Retirement Time

80 percent women would prefer to spend their retirement time for personal interest while just 70 percent men want to spend time in such a manner. 80 percent women also planned to spend time with family and just 67 percent men want it. 75 percent women want to socialize when they have taken retirement while only 52 percent of men want socializing after retirement.

58 percent women want to volunteer when compared to men as only 42 percent men are interested in volunteering after retirement. 43 percent women wish to care for their family members and just 26 percent men want to take on that responsibility. 36 percent women were inclined to participate in religious activities after retirement while only 25 percent men have planned to do the same.

Craving Company but not Dependency

Men and women have the same perception about having enough retirement benefits so that they don’t become a burden on others. Women also had more fear that they would be a burden on others by having no money when compared to men. 29 percent women fear it while just 14 percent men fear it. 19 percent of women were very concerned about being lonely and about 11 percent men think the same.

Half of American Population Opts for Retirement by 63: Survey

Retirement is not an easy choice for people. Some people prefer to work as long as they can to keep their finances in a good position while others prefer to retire early even when it means losing out on some benefits. A personal finance technology company, SmartAsset recently tried to decipher how the average retirement age is varying across America and revealed some interesting fact about retirement in America.


The Method of Retirement Study

SmartAsset tried to find the average retirement age in every state by using the microdata on labor force participation. This data was made available by the U.S. Census Bureau. The organization focused on the labor force participation rates for people who were between the ages of 40 and 80 years.

It is vital to mention here that the labor force participation rate shows the percentage of people who are unemployed or employed. During the analysis, SmartAsset controlled for the percentage of people who were not a part of the labor force.

Similar Results

In this years’ survey, SmartAsset found that the national retirement age in the US hasn’t changed much as compared to the survey results of the year 2015. By the time people reach the age of 63, nearly half of them had opted for retirement. It was the same in 2015.

The survey also exposed the fact that the youngest age for retirement across all the US states was 62 while 65 was found to be the oldest average retirement age. This was also the same in the last years’ survey.

Late Retirement

The results of the survey also highlighted that retirement comes late in New England as four states in this region have the oldest average retirement age, i.e., 65. It was also mentioned that the average resident in New Jersey retires at 65 too.

Fewer Late Retirees

The useful survey also found that people in America don’t like to go on working after they hit the 80 years mark. Only 6 percent of Americans didn’t take retirement after they hit the age of 80 while a vast majority of them were retired. This percentage has also not changed since last year.

The Upcoming Change

Experts believe that the number of people who did not opt for retirement in their 80s is bound to increase in the next few years. It has also been predicted that the average retirement age would also increase.

Poor Financial Planning Will Force Millennials in Phoenix to Work Post Retirement Age

A survey conducted by a financial firm has stated that poor financial planning will force Millennials in Phoenix to work post retirement age. Experts believe that Millennials should get over the self-taught financial planning and should seek advice from an investment expert to make the right investment decisions. They should also seriously consider plans like 401(k).

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Survey Says Poor Financial Planning Will Force Millennials in Phoenix to Work Post Retirement Age

The survey that says poor financial planning will force Millennials in phoenix to work post retirement age was conducted by Merrill Edge. It is a biannual survey. The results of the survey highlight that about 82 percent of the workforce in Phoenix expects to work past the retirement age. Three factors were mentioned. One is the poor financial planning done by this generation and the second is the zeal to follow a passion. The third reason is the need to keep busy.

Experts Opinion

Tom Gustafson, a spokesperson for Merrill Edge stated that he was shocked to see the number. He believes that lack of planning is the key reason for why the millennial generation is lagging behind. He believes that proper financial planning is not as hard as they think it is. Though most of the Millennials want to retire with money in the bank, many fo them are going about it in the wrong way. They are self-taught investors who have learned to invest by using the internet which makes them invest in those funds that have a higher risk and the same financial returns.

The Advice

Gustafson says that if Millennials put in the time to learn all the things about investment, they would probably do okay but when they try to do the investments without looking at all the angles, it causes them problems.

If Millennials want to contradict the assumption that poor financial planning will force Millennials in phoenix to work post retirement age, they should just check the investments with a financial advisor every once in a while to ensure that the things are running as expected, believes Gustafson. He also adds that Millennials particularly need to be realistic about a so-called magic number or the amount of money they would require to live the way they want to post retirement. They should also think about investing in plans like 401(k) and stay away from debt whenever possible.

Survey says Student Loans are a Financial Planning Threat as they Impact Retirement Savings

A new survey has highlighted that rising amounts of student loans and the time taken to get rid of them is taking a toll on the retirement savings of Americans. People with a student loan to pay often need to save less towards retirement which is a financial planning threat. It was recommended that the HR of companies should help the employees in this situation by hosting workshops that assist in better management of finances.

financial planning

The Survey on Student Loans as a Threat to Good Financial Planning and Retirement Savings

The survey that states that student loans are impacting the financial planning abilities and the retirement savings of Americans was conducted by a renowned benefit consulting firm known as Aon Hewitt. It found out that the employees who have student loans that need years to be paid off can make people feel the strain even in their retirement years.

This survey was conducted on over 2,000 U.S. workers. It found that about 28 percent of the respondents had an outstanding student loan at the moment. It’s not the workers of the younger generations that are impacted. About 44 percent of the Millennials, 26 percent of respondents from the Generation X and about 13 percent of respondents from the baby boomers’ age group have a student loan debt. It is being estimated that about half must pay $3000 per year as a payback.

The Low Savings

It was also made clear by the survey that about 71 percent of respondents who had a student loan to deal with saved less money on a retirement plan provided by the employer. In contrast, respondents who had no student debts, about 77 percent saved more towards the employer-provided retirement plans.

Savings Percentage

About 51 percent of the Americans who had a student loan just contributed 5 percent of the total pay to the plan. Aon Hewitt says that saving less than 6 percent of pay towards the retirement savings can hinder retirement readiness as most workers miss out on the full matching contributions by the company.

The Advice

Aon Hewitt also said that the HR of a company can help people in better financial planning by offering workshops. People should also be given advice on participating in retirement savings plans. Some employers already offer benefits that are designed in a way that helps employees to pay the student loans quickly.

Over Half of Washingtonians Anxious About Retirement Benefits

A new survey has highlighted the fact that more than half of the people living in Washington are anxious about their retirement benefits and financial security. To help the situation, a campaign has been organized which will help people to learn the better methods of saving. The campaign would also encourage the people of Washington to increase the amounts of their retirement benefits savings.

financial planning

Financial Security and Retirement Benefits are a Major Worry

The survey was conducted by AARP. It highlighted that about 55 percent of people in Washington have confessed to being worried about their retirement benefits and their financial security post retirement. There are many groups that got concerned about the survey results and they have decided to initiate a campaign to help people save more and be less anxious.

Useful Campaign

The campaign that is supposed to help people of Washington to save more is organized by BECU, AARP and the FINRA Investor Education Foundation. This campaign is called the MoneySmarts campaign. It was launched at the Museum of Flight in Seattle. It will go to the road across Washington too.

People Haven’t Recovered from Recession

The financial editor for NBC’s Today show and the AARP financial ambassador Jean Chatzky recently stated that people are yet to recover from the recent economic recession. She said that the markets have already done so. She stated that the S&P and Dow are up 180 that is more than 200 percent in some cases. They hit the bottom in the year 2009. But people have been sitting on the sidelines and hence they have not capitalized on that.

Chatzky further stated that about two-thirds of people still need to recover from the great recession. It is pertinent to add that she was the keynote speaker at the kickoff of the MoneySmarts campaign.

Fewer Savings

The survey also highlighted that almost half of the adults living in Washington have saved less than $25000 for their retirement benefits savings. It also discovered that two-thirds of Washington people have even not calculated how much money they need for retirement. Chatzky said that Fidelity Investments recommends that people should save 10 times their annual income if they plan to retire at 67. She suggested methods like putting off taking social security, starting saving earlier and retiring a little later are some simple ways to achieve the number that may seem gigantic but isn’t so.

Free Retirement Benefits Planning Advice to be offered across the US

Many people often feel that they need the assistance of a financial planner to ensure that they do their retirement benefits planning right or manage their finances in a correct manner. Unfortunately, not all people can afford it. To help such people out, a program is being organized across the US which will offer free financial advice to people. This program would cover various US cities and would be organized in the month of October only.

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Program Offering Free Retirement Benefits Planning Advice

The program that lets people get free advice on retirement benefits planning and personal finance will be sponsored by the Financial Planning Organization, the Certified Financial Planner Board of Standards, the U.S. Conference of Mayors and the Foundation for Financial Planning. As a part of the program, hundreds of financial planners will provide free financial advice to the area residents.

The financial planning days will be organized across various US cities and the cooperation from the local city governments will be sought. The program is now in its seventh year. The events regarding the program will be organized in schools, libraries, and municipal buildings depending on the city.

Core Mission

The mission of the program is to offer free and ethical financial planning advice to the people by various means. The means include group workshops and even one-on-one advising sessions. All the financial advisors would provide the attendees with no-strings-attached advice and they are not allowed to sell any financial products/ services, take names or offer business cards.

The Process

During the financial planning days, the financial planners would be seated at tables and they will meet privately with the individuals as well as couples to answer their questions. The topics of the discussion can vary from getting out of debt to managing credit, budgeting to income taxes, planning & paying for college to home ownership and from insurance to estate planning. Free classroom-style workshop presentations will also be conducted that would cover the key areas of personal finance.

Financial Planning in Local Communities

Pamela Sandy, who serves as the President of FPA stated that people often think that financial planning is something the wealthy people can afford but this is not true. The members of the Financial Planning Association constantly work to ensure that financial planning is accessible within the local communities too.

Vital Details

People who wish to attend the sessions for attaining some financial planning or retirement benefits planning advice in their cities need to visit FinancialPlanningDays.org for free registration. Walk-ins are allowed too. A person can also call a toll free number 1-877-861-7826.

Nevada People Pessimistic About Retirement Savings

The people of Nevada are quite pessimistic about the retirement savings according to a new study. Some sections of society were more stressed about retirement than the others. The survey also highlighted that very few Nevada people felt that there were some opportunities to get financial security. These people also seemed positive about the economic conditions of the state.

Majority Leans Toward Fewer Retirement Savingsretirement savings

Slightly more than 50 percent Nevada people have accepted that they don’t think they have enough income to have good retirement savings that would allow them to have an ideal retirement. This was revealed in a poll which was conducted by Wells Fargo and USA Today. The same poll also highlighted that about 38 percent Nevadans were confident that they would have enough savings for retirement.

Different Confidence Level

The survey has also highlighted that some people in the society, especially senior citizens, women and the poor were more concerned about the retirement. About 60 percent of women and people who were over 55 years of age or older were not confident that they would enjoy an ideal standard of living in retirement. About 59 percent of people belonging to the low-income category also lacked the confidence.

All in all, only 1 in 5 Nevadans believed that there are opportunities to have financial security during retirement within the community.

Confidence in the Economy

While the respondents were not so confident about whether they would be able to save for retirement or not, they seemed confident that the economic conditions are and will be better. About 44 percent of the respondents said that the economic conditions in the state were fair while 38 percent stated that it was good or very good. Let’s see what the Nevadans think of the national economy. Just 19 percent of Nevadans had a positive impression of the national economy and about 39 percent termed it to be poor or very poor.

Positive Financial Situation in the Future

Nevadans also think that their financial situation is not better at the moment when compared to the national average. But they expressed hope that it would improve in a year from now. About 47 percent respondents acknowledged it. This optimism for the future is higher than the optimism expressed by the country as a whole.

Brian Bonnenfant who serves as the Project Manager at the University of Nevada stated that the pessimism about now and optimism about the future is not a new thing. It speaks to the extremely transient nature of the people of Nevada. He added that it is the typical Nevada demographic.

All in all, it can be said that the survey reveals that Nevadans need to ensure that they have better retirement savings and a positive approach towards their current financial situation.

U.S. Workers Feeling Better About Retirement

A new survey has revealed that many of the U.S. workers are feeling great about retirement and the U.S. economy in general. The survey also revealed the fact that U.S. workers are now relying on robo advisors to guide them on investment decisions. It is expected that their dependence on robo advisors would increase in the future too as more and more people are becoming aware of it.

retirementThe Survey Showing Better Feelings about Retirement

The survey that revealed that the U.S. workers are considering the U.S. economy and the retirement prospects to be moderately better was conducted by Wells Fargo/Gallup. It was entitled the Investor and Retirement Optimism Index survey. The survey was done by tracking 1,019 investors who had an investment or savings of over $10,000.

The Increase

The survey also showed that the index rose by 22 points only in the second quarter of 2016. It is the highest level the index has achieved since the second half of 2015. The Wells Fargo Index for non-retirees rose by 27 points and the index for actual retirees rose by 25 points across the board.

The Bullish Strategy

The survey found out that many respondents were bullish on the U.S. stock market which boosted their prospects of a higher household income.

Robo Advisors

The survey highlighted the crucial fact that there are several people who are depending on robo advisors. In simple terms, robo advisors are digital advisory services that make use of several computer algorithms to select the suitable investment options like stocks for people. The robo advisors make use of the information provided by people with regard to their risk tolerance and goals.

The Awareness

In the survey, it was also pointed out that about 45 percent of retirement investors now have an awareness of robo advisors. Currently, only 5 percent of these investors have admitted to using it. It is being expected that the awareness levels and the usage would increase in the future.

The Opinion

The Head of Digital for Wells Fargo Advisors, Mr. Devon McConnell stated that the automated infancy tools are still in the infancy stages but it is expected that the awareness of these tools will grow quickly. He correlated these tools with online shopping and said that there is an adoption curve that happened with online shopping and it is expected that a similar curve will be repeated with regard to robo investment advisors when people become comfortable with this new method of investing. People planning their retirement are also expected to trust this method in the future.

Philadelphia Residents Contributing Least Towards Retirement Benefits

A new research has proven that Philadelphia residents contribute the least amount of money towards their retirement benefits. They are hence less prepared for the retirement and may struggle financially in their senior years. The major reason behind the fewer contributions is that most employers don’t provide a provision of retirement savings to the employees. Officials agree that this issue needs to be solved as soon as possible.

Retirement Benefits

The Need to contribute more to Retirement Benefits

The research that says that most Philadelphia residents are less prepared for retirement as compared to the Americans living in other states was done for a city council committee. The committee aims to know how to improve retirement savings. The study was conducted and released by the Schwartz Center for Economic Policy Analysis on Wednesday. It was divulged during a hearing conducted by Council’s Committee. The hearing was on Labor and Civil Service.

The Current Situation

During the hearing, several witnesses testified to the fact that there is a retirement crisis in the U.S. The witnesses also stressed that the retirement crisis in Philadelphia is particularly troublesome. The study exposed that about 20 percent of retirees in Philadelphia are poor and about 30 percent have incomes between 100 & 200 percent of the federal poverty level.

The Reason

Anthony Webb who works at the Schwartz Center for Policy Analysis stated that the reason behind the Philadelphia’s people saving less for retirement is that the employers who offer retirement plans are very few. Even those who offer a plan don’t always participate in the plans. He also added that a high proportion of seniors are nearing closer to poverty and the people who are working right now are also at a high risk of retiring in poverty.

Need For Action

Webb also stressed on the need to offering a retirement plan to people who don’t have any yet. He stated that offering a retirement plan may not help them to have a retirement of their dreams but it will definitely help them to get away from the poverty and near poverty situation they are facing right now. He insisted that the sooner an action is taken in this regard, the higher would be the number of households that get help. When a swift action is taken, they will be able to save a bit more money towards retirement benefits.

Finding Financial Advisors for Federal Employees by Nelson Secretario

Advice for Federal Employees about Financial Advisors by Nelson Secretario

Nelson SecretarioNelson Secretario – CLU, ChFC, LUTCF, ChFEBC, NSSA

Federal employees have a special set of benefits that are available to them in terms of retirement income. While this can provide a nice advantage for these individuals, it can sometimes make it difficult when working with a general financial planner – especially when that planner is unfamiliar with how the federal retirement system operates.

While there are many well qualified financial professionals who can offer general retirement planning advice, when it comes to providing information that is specific to federal employees, it is therefore best to work with someone who is specifically focused in this particular area.

Where to Find an Advisor with a Focus on Federal Employees?

When searching for an advisor who has a focus on federal employees, you will want to ensure that he or she meets certain criteria. For example, in most instances, the advisor will advertise either on their website and / or other materials that they work with employees of the federal government.

In addition to having a “Fed” focus, you will also want to be sure that the advisor has an ample amount of overall experience – a minimum of ten years, as well as proper licensure. In this case, possessing a Series 7 securities license is a must. You can typically tell if a professional is securities licensed by noting whether or not they have “FINRA / SIPC” noted on their marketing materials.

Once you have found a good potential candidate for your needs, the next step is to contact the advisor and set up a meeting with them. As you will likely be working with the advisor for many years – and turning over a bulk of your life savings to them – it is essential that you are able to work together, and that you have trust in him or her as a professional.

You may even want to bring along some questions to ask the advisor, such as:

  • What services to you offer?
  • What are your professional qualifications?
  • How are you compensated?
  • Do you work alone or with a team?
  • What licenses do you hold?
  • Do you possess any additional professional designations?

While the process of finding the ideal financial advisor may take some time, once you have found one who is well qualified to work with you, and who you are comfortable working with, you will be able to successfully move forward towards your retirement goals.

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Obama Wants Better Retirement Benefits Plans for Americans

President Obama and the Democrats are working hard to ensure that the common American citizens are not cheated by the financial brokers when they are seeking a good retirement benefits plan. The Republicans argue that the financial brokers already deal with so many rules and the new rules would force them to get rid of main clients and small businesses.

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Obama to use Veto for Retirement Benefits

It is also being speculated that the President may use his veto power to ensure that the Labor Department rule on retirement benefits advice is passed. He may be forced to use the veto power because the U.S senate has voted against the bill. The debate on the passing of this bill stretched over the entire day on Tuesday.

The Rule

The rule that is proposed by the Obama government aims to set a fiduciary standard for financial brokers who are involved in selling retirement products. The new rule would make it mandatory for them to put clients’ best interests ahead of their own need to achieve the bottom lines. The arguments in the session mostly focused on whether the new bill would be in the best interests of the lower and middle-income workers or not.

Republicans’ Stand

The Republicans are against the bill because they think that the government is not taking into account the fact that there are already so many rules in place that need to be abided by the financial advisors. The Republicans also think that this rule would be very expensive for brokers. If this rule is imposed upon them, it may force them to let go of the small businesses that offer 401(k) plans and the Main Street clients.

Democrats’ Viewpoint

The Democrats are of the opinion that imposing this new rule is vital for ensuring that the profit-hungry financial advisers don’t exploit middle- and lower-class workers anymore. They do that currently by recommending those retirement products that are profitable for them rather than their clients.

The Statements

Johnny Isakson, a Georgia Senator stated that the rule is a solution which is seeking a problem. His fellow, Lamar Alexander, a Tennessee Senator added that the rule should be renamed as only the rich retire rule.

Democrats were not behind in making statements too. New Jersey Senator, Cory Booker said that the new rule will help people to retire with dignity. It will also ensure that people don’t worry whether their financial adviser offering advice on retirement benefits would lead to exploitation or not.

New Retirement Saving Tool that can Improve Your Retirement Benefits

Almost all individuals who are planning to have a comfortable retirement often seek the help of tools that can direct them. Principal, a financial planning company has made things easier for such people by recently launching Move to the Green Challenge. Any person, who is planning to retire, can participate in this challenge by using a financial wellness tool. It tells you whether you are saving enough for your retirement benefits or not.

Retirement Benefits

How the Retirement Saving Tool helps in deciding the Retirement Benefits?

The retirement saving tool works by using a real-time savings graph, interactive sliders, and intuitive prompts. They will let you know how making a few simple changes can help you to have more financial security and a steady flow of retirement benefits.

The tool would also offer every user a personalized score that tells them whether they are on the right path or not. It also has red, yellow and green indicators. Everyone should aim for the green indicator as it means that you will get 70 to 85 percent of our current income after retirement.

The Previous Attempt

The company issued a statement that stated that a similar initiative was started last year and people liked it too. About one-third of people who participated last year increased the retirement plan deferral amount by 3.75% points to get 10% of pay. The statement also announced that there has been about 30% increase in the number of participants who made use of the plan and increased the deferrals since the launch of the Retirement Wellness Planner of the company.

Personalized Experience Helps

The Senior Vice President of Retirement and Income Solutions at Principal, Mr. Jerry Patterson recently stated that the idea of offering a personalized as well as interactive online experience plays a vital role in helping users understand how and where they can make better saving decisions. They are making use of the suggestions. He also added that saving more and earlier is the best thing all people can do to be well prepared for retirement.

The Benefits

People who take part in the Move to the Green Challenge would not only boost their retirement benefits, they have also got a shot at winning a few Plantronics BackBeat FIT wireless stereo headphones. If a person plans to try the challenge, it is not mandatory to have an existing retirement account with Principal.

How the retirement gap can be closed by help from small businesses

The retirement gap has been inhabiting our country for quite some time now. There are some solutions in this regard and the multiple employer plans might help us in this regard.

post-RetirementClosing the retirement gap possible?

In this regard, there is always space for putting some background information in: It’s not news for anybody that the experts have always considered the US retirement gap to be higher than what it should be. The money that Americans have to additionally spend to secure their retirements and their post-retiring life is a lot, to say the least. The Employee benefit Research Institute has estimated that this gap is around 4 trillion dollars of American citizen money.

We all are pretty much aware that this gap isn’t going to close itself and unless we can provide a lot more access to the retirement plans it’s going to stay this way. Companies and individuals that don’t have workspace retirement plans can go on and fund IRAs for all their employees. According to a study, if a retirement plan is available to people that earn around 30 to 50 thousand dollars a year, 70 percent of the employees opt for it. Only 5 percent will still fund an IRA even if it isn’t imposed on them by their workspace.

It’s worth mentioning that there are many small and large companies that do offer proper retirement plans but there is still a shortage of them. In order to close the retirement gap once and for all, collective effort of all the small and large workspaces is required. If companies provide their employees the insight that they require then they are more than likely to spend the small amount of money in the urge of securing their future. Here’s hoping that this can happen in the coming years.

Over 40 Million Americans Regret not saving earlier for Retirement Benefits

retirement benefitsA recent survey done by Bankrate.com has revealed that most of the Americans live with financial regrets. They primarily regret not saving enough money for retirement benefits. The other thing they regret is not saving for emergencies. The survey also revealed that people had better financial situations, financial security, and net worth when compared to a year ago.

Retirement Benefits and Emergency Savings are Key Regrets

Most of the Americans admitted that they had financial regrets. The percentage of Americans admitting the regrets was 75%. This was revealed in a study done by Bankrate.com. The study also found out that 18% or about 42 million Americans thought they should have started saving earlier towards their retirement funds. The study also found out that about 13% Americans thought they didn’t have enough money to pay emergency expenses.

Age and Retirement Saving Regrets

The survey also uncovered the fact that the Americans who were older had more concerns with regard to not saving up early for retirement. People who were more than 30 years old felt that they should have started saving for retirement early on. About 17% of respondents who were between the ages 30 to 49 regretted it. About 24% of respondents who were within the age range of 50 to 64 had this regret too. The percentage increased to 27% when the respondents were over 64 years of age.

Expert Opinion

The Chief Financial Analyst of Bankrate.com, Greg McBride, CFA stated that most Americans dealt with the financial distress of not having enough savings.

Better Financial Situation

The good news for the Americans is that they got better at other financial factors.  The number of Americans who admitted that their financial situation is better than it was one year ago is almost double the number of people admitting that their financial situation is worse. The Financial Security Index of Bankrate.com is at its 2nd-highest reading ever. It is currently 104.7.

About 31% of Americans have also confessed that their net worth is better than it was a year back and just 13% said that it has worsened. The financial security of men and women has improved considerably in the last one year too. Each posted the best readings in over 1 years’ time.

The Survey Subjects

The survey that found out all about the retirement benefits regret and the financial situation of Americans was done on more than 1,000 adults who were living in the continental United States. It was conducted by Princeton Data Source from May 5, 2016, to May 8, 2016.

Investment Fees Cutting Down on Retirement benefits of the Millennials

The Millennial Generation is often encouraged to invest more towards retirement benefits in order to get higher benefits when they retire. But things don’t seem to be as simple as that. A recent analysis has revealed that a lot of money invested by the millennials towards retirement savings often ends up towards investment fee.

Retirement benefits Fee too High?

retirement benefits

The analysis of retirement investments was done by NerdWallet. The analysis revealed that if millennials pay just 1% towards the investment fee, they would end up losing more than $590,000 as it will be counted as lost returns. The figure is based on the entire course of their savings lifetime.

The Benefits and The Loss

Time seems to give a big benefit to the generation Y. They have the advantage of at least three or four decades to create their own nest egg as compared to their precursors. This time is also an enemy because the investment fees grow with time. The analysis has exposed that the impact of constantly rising investment fees can cut down the retirement benefits of a millennial by over 25%.

The Instances

The analysis was done on a subject who was a 25-year-old person  depositing $10,000 in the retirement savings fund every year. The savings account already had $25,000. The subject earned an average annual return of 7%. The person planned to retire after reaching the age of 40 years. Only 1% investment fee snowballed over time as the portfolio of the subject grew.

In one scenario it was seen that a mid-cap mutual fund that had the ratio of just over 1% was to earn $1.77 million after a time span of 40 years. The ETF also grows at a rapid pace. The index-based exchange-traded fund that had the fee of 0.09 percent was to grow to $2.3 million in the span of 40 years.

Fees in Other Vital Plans

A very similar analysis has revealed that a target date fund which is commonly used in the 401(k) plans that had a 0.75% fee were to grow to $1.9 million within the time span of 40 years. A robo-advisor portfolio was to grow to $2.2 million in the same time span.

Impact on Overall Reduction

The analysis also found out that every dollar deducted in the form of investment fee would be one dollar less left to invest in the retirement benefits.

Many U.S. Citizens Don’t Understand Retirement Benefits Plans

A recent survey has revealed that a large portion of U.S. citizens don’t understand their retirement benefits. The employees were asked about many other financial planning topics. The survey also pointed out that the respondents were eager to get a financial wellness program from their employer but they were reluctant to pay any money for it.

How Many People Don’t Understand Retirement Benefits Plans?

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The 2016 FSFE Employee Financial Wellness Survey conducted by the Four Seasons Financial Education found out that 35% respondents said that retirement was the most important financial goal for them. 70 percent of people who come in the age category of 45-50 said it was a priority for them.

As per the survey, 39% of respondents stated that retirement benefits were among the most difficult to understand benefit offered by the employer. The other benefits that people didn’t understand were the health insurance benefits as 26% of respondents didn’t understand it.

Financial Wellness Programs Boost Retirement Benefits Understanding

The survey also pointed out that people who are working for an employer offering financial wellness program had a better understanding of the 401(k) plan investment options. About 22% of such people said that they understood the plan extremely well. On the other hand, just 14% of people who work for employers that do not offer financial wellness program stated that they understand the 401(k) plan investment options extremely well.

Retirement Help Expectations

About 48% of the respondents expect their employers to offer access to one-on-one guidance from a financial professional as a part of the retirement help. About 38% wanted the employers to offer retirement education. 23% respondents wanted the employer to offer tools and calculators and 19% seek the employers’ ability to include retirement education of a spouse or a partner. 11% wanted other unspecified retirement help from the employers.

Employees Want Financial Wellness Programs

More than 39% respondents confessed that they would be more satisfied with the employer who offers financial wellness program when compared to an employer who does not offer any financial wellness program.

About 33% of respondents also admitted that they won’t want to pay for the financial wellness program by terming at as unlikely. 49% of respondents said that they would possibly be willing to contribute a bit to the financial wellness program while only 18% of respondents were willing to share some of the cost of such a program.

The lack of understanding on retirement benefits is a very serious problem that needs to be solved immediately.

What the new fiduciary rule has in store for you

The Department of Labor presented a new rule this past week that will require financial advisors who are handling retirement accounts to begin acting as fiduciaries. This fiduciary rule will imply that the needs and interests of the clients, be given first priority.

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What The Fiduciary Rule Means To You

There are some questions though regarding the fee structure and retirement savings that employees would like answered. Here, we try to analyze those questions:

a) If you are not a financial advisor, will your life change?
This is the first question that must pop up in minds of everyone involved.  How will the new Fiduciary Rule impact me?  The answer takes heed from the fact that the new rule is focused primarily on retirement savings. Having said that, any point of contact you might have with an IRA, 401(k), Thrift Savings Plan (TSP), etc. will be impacted.

b) Is your financial advisor a fiduciary?
All the financial advisors that have the following designations: Certified Financial Planner or Registered Investment Adviser, are in fact fiduciaries, by default. Depending on a percentage of your assets, they will typically charge you based on the assets you hold with their firm or possibly a set hourly or yearly fee.
The story is different however if you have an IRA at a Brokerage Firm and your major interaction is with a person who works with you as a Salesperson or who offers advice which is solely ‘Suitable’ (which is the vast majority of financial professionals) vs. that which is truly in the clients best interest, the answer can be a bit different.

c) Will money be saved?
Lastly, if you were making your deals with an advisor who works on commission the new Fiduciary Rule may end up helping you a great deal, but the new rule does not go into effect for at least a year from the writing of this article so we’ll see how much actual impact the final Rule actually has.

Survey Shows Lack of Retirement Savings Among Federal Employees

Federal Reserve Board Survey Shows Lack of Retirement Savings among Federal Employees


The new Federal Reserve Board (FRB) survey and report on the economic well-being of U.S. households in 2014 has some startling data about the lack of retirement savings and planning among survey respondents.

For starters, only 13 percent of respondents who are not currently retired said they have given “a lot” of thought to financial planning for retirement. A full thirty-nine percent of respondents say that they have thought only “a little” or “none at all” about it.

It doesn’t follow that those who aren’t interested in financial planning are the only ones not saving for retirement. On the contrary, the Federal Reserve Board survey shows that 31 percent of non-retired respondents say they have no retirement savings or pension whatsoever.

Forty-two percent of respondents who do not participate in a plan indicate that they do not participate because their employer does not offer a plan, and six percent say that their employer offers a plan but does not match contributions.

 Do You Know Your Contributions to Your Retirement Savings Plan? 

Among those who are contributing to retirement savings plans, a full 47 percent said they had a defined contribution plan, such as the TSP, 401(k) or 403(b) plan. Only 22 percent of respondents said they participate in a traditional defined benefit pension plan through an employer.

Many respondents also seem to have very little idea about how much they are saving or contributing to their retirement savings plans, and level of the 401(k) match provided by their employer.

When asked what fraction of their paycheck they contribute to their TSP (or similar), 23 percent of respondents who have a retirement account say that they do not know. Additionally, 41 percent of respondents whose employer offers a plan say they do not know the maximum fraction of their salary that their employer will match.

Only 29 percent of respondents said they have an individual retirement account (IRA), and 37 percent indicate that they have savings outside of a formal retirement account.

Other TSP and Retirement Related Articles

TSP Board Approves Wider Investment, Withdrawal Options

TSP Bill Allowing Employees to Withdraw Thrift Savings at Age 50

What Are Your TSP Options With the New Phased Retirement Program?  by June Kirby