Here’s a short list of “resolutions” that you can share with your retirement plan participants

English: Retirement savings rate as squirrel a...
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These resolutions must be kept in order for plan participants to successfully retire. I believe the great recession has taught us that we can not rely on the government for our financial future. Each individual must be accountable for their own financial future.

___ Resolve to participate in your workplace retirement savings plan. If you are not already saving for your retirement in your workplace program, you are missing out on one of the most important—and easiest—ways of making sure that you are on track for a financially secure retirement.  Unless, of course, you have a rich (old) uncle.

___ Resolve not to miss out on the company match.

Odds are your employer matches your contributions to your retirement savings account up to a certain level, say 5% of 6% of your pay.  Whatever that level is, if you do not contribute up to that point, you are letting “free” money slip through your fingers.  

___ Resolve to increase your savings rate in your workplace retirement savings plan by at least 1%. 

If you are already saving, are you saving enough?  Have you ever made an attempt—with some kind of planning tool or the assistance of a financial adviser—to figure out how much you will need?  Even if you have, it is remarkably easy to increase your current rate of savings by as little 1%–and you might be surprised just how much difference that will make!

For plan participants to successfully retire these resolutions should be made and kept.

Please comment or call to discuss how these ‘resolutions’ will help you employees.

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Top 10 Reasons Middle-Class Retirement Is at Risk

Proportion of pay to save.
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We must educate plan participants that they will need to be responsibile for their own retirement. Unless they wish to work until they drop. This education must include developing a budget and following the budget.

1. Household wealth is vanishing.Retirement is the largest reason for families to save. Declines in household wealth are thus drops in retirement income security. Household wealth was $12.4 trillion (in 2011 dollars) lower in March 2011 than in June 2007, the wealth peak before the crisis.2. Retirement standards of living will slip. More than half of all families will not be able to maintain their standard of living in retirement. The share of families under the age of 65 who were not yet retired but who could not maintain their standard of living in retirement stood at 51 percent in 2009, the last year complete data were available.

3. Fewer employees are covered by a retirement plan at work. The share of all private-sector workers who participate in a retirement plan at work, either a defined-benefit pension or a defined-contribution retirement savings plan such as a 401(k) plan, dropped to 39.6 percent in 2009, down from 41.5 percent in 2007 and from 44.4 percent in 2000.

4. Balances in 401(k) plans are still well below their pre-crisis levels. The median account balance for all people with 401(k)s was $17,794 in 2009, down from $18,942 in 2007 and down from a peak of $19,926 in 2004.

With proper plan design your company retirement plan can be seen as a true benefit. We can provide a pension fund like plan for employees which would benefit both the participants and the plan sponsors.

Please comment or call to discuss how this affect you and your employees.

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