Americans are having doubts about their ability to fund the retirement of their dreams. Nearly half of Americans noted that their main concern in retirement is running out of money.1
The apprehension felt by individuals who are nearing retirement is caused by a number of factors, including:
As traditional pensions continue to disappear, today’s retirees need to rely more heavily on their retirement plan savings, personal savings, and Social Security for their retirement income.
In the U.S., the median retirement savings in 401(k) accounts and individual retirement accounts for those ages 55 to 64 who have a 401(k) account is only $120,000.2 Without a substantial savings balance, retirement lifestyles may need to be dialed way back.
According to the Employee Benefit Research Institute (“EBRI”), in 2019, a 65-year-old man needs $144,000 in savings and a 65-year-old woman needs $163,000 in savings to have a 90% chance of covering healthcare expenses without running out of money.3 This figure increases for a couple with relatively high prescription drug expenses – in this case, EBRI reported that a retired couple could need as much as $363,000 to cover healthcare expenses throughout retirement. And this does not include long-term care costs. A 65-year-old today can expect to pay $138,000 in long-term care costs over their lifetime.4
As individuals are heading into retirement, debt may impact their ability to pay their daily living expenses and cause undue stress. Baby boomers have an average of $191,650 in mortgage debt and $25,812 in non-mortgage related debt that they are carrying into their retirement years.5
Help with Financial Wellness
The Program offers a number of resources that can help participants and your employees prepare for and feel more confident about retirement security.
Phone-Based Support
Participants can call 844.253.8692 and can connect with a Financial Professional6 for live one-on-one support. They can discuss money matters, such as managing student loan debt or preparing for retirement, and receive a free personalized Financial Snapshot.7 Alternatively, participants and other employees can work with a financial representative who can provide in-plan investment guidance, Professional Management, and a personalized Retirement Evaluation8 for an additional fee.
Online Planning Tools
The ABA Retirement Funds Program (“Program”) also offers participants [and other employees] a number of free online planning tools that they can use as they think about their finances and their future. Here are just a few of the resources available:
5 Steps to Get Retirement Ready
This is a retirement planning guide and educational tool for participants [and other employees] nearing retirement. It breaks down the process to become “retirement ready” into five easy steps and provides tips and resources for deeper dives into certain information along the way.
Personal Financial Dashboard
This planning tool helps participants organize their financial life, including their Program account, plus outside savings, investment accounts, and household budgets. The link is under the Did You Know section on the participant login home page at abaretirement.com.
Online Advice
This service offers investment recommendations, retirement income forecasts9 and quarterly Retirement Updates.8 Participants can access online advice after logging into their Program account and clicking Get Professional Advice in the top navigation bar.
Distribute the brochure from the link (“resources”) to your participants today or during your benefits open enrollment period.
1 https://www.aarp.org/retirement/planning-for-retirement/info-2019/retirees-fear-losing-money.html
2 https://crr.bc.edu/app/uploads/2020/10/IB_20-14.pdf
3 EBRI May 16, 2019; Accessed June 23, 2019 from https://www.ebri.org/content/savings-medicare-beneficiaries-need-for-health-expenses-in-2019
4 https://www.cdc.gov/nchs/data/series/sr_03/sr03_038.pdf
5 https://www.cnbc.com/select/how-much-debt-do-baby-boomers-have/
6 Financial Professionals are Investment Advisor Representatives of, and offer securities and investment advisory services through Voya Financial Advisors (VFA), Inc. (Member SIPC).
7 For more complex situations, your VFA representative can design a complete financial plan for a fee of up to $1,500. Neither the Financial Snapshot nor the full financial plan includes investment recommendations for in-plan assets.
8 Advisory Services provided by Voya Retirement Advisors, LLC (“VRA”). VRA is a member of the Voya Financial (“Voya”) family of companies. For more information, please read the Voya Retirement Advisors Disclosure Statement, Advisory Services Agreement and the ABA Retirement Funds Program’s (“Program’s”) Fact Sheet. These documents may be viewed online by accessing the advisory services link(s) through the Program’s web site at www.abaretirement.com after logging in. You may also request these from a VRA Investment Advisor Representative by calling the Program’s information line at 800.348.2272. Financial Engines Advisors L.L.C. (“FEA”) acts as a sub advisor for VRA. FEA is a federally registered investment advisor. Neither VRA nor FEA provides tax or legal advice. If you need tax advice, consult your accountant, or if you need legal advice, consult your lawyer. Future results are not guaranteed by VRA, FEA or any other party and past performance is no guarantee of future results. Edelman Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All other marks are the exclusive property of their respective owners. FEA and Edelman Financial Engines, LLC are not members of the Voya family of companies. ©2021 Edelman Financial Engines, LLC. Used with permission.
IMPORTANT: Forecasts, projected outcomes or other information generated regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. In addition, results may vary each time a forecast is generated for you.
