A digest of timely information and insight about finance, investing and retirement.
Something Very Significant Just Happened to 401(k) Plans | Time
Withdrawals from 401(k) plans are now exceeding contributions, according to data cited by the Wall Street Journal. While baby boomers are retiring, younger workers are incapable or less interested in saving for retirement.
Most Americans unaware of 401(k) fees | BenefitsPro
Research from the National Association of Retirement Plan Participants shows that 58 percent of working Americans don’t realize they are paying fees for workplace retirement savings plans. Of those who do know, most don’t know how much the fees cost.
Many Americans have no retirement savings: Federal Reserve study | The Economic Times
Nearly a third of working Americans have neither a pension nor retirement savings, according to the 2014 Survey of Household Economics and Decision-Making, published by the Federal Reserve.
Americans Prioritize Short-Term Finances Over Distant Needs | PlanSponsor
Americans at all ages and income levels are shortsighted about their finances, according to a study from the Center for Retirement Research at Boston College. Even the wealthiest Americans favor short-term measures of financial fitness over longer-term measures. Findings suggest that retirement savings should be easy and automatic.
Can 401(k) Plans Be Improved? | The Atlantic
Americans often don’t save enough in their 401(k) plans and use the money that they do save too early, setting themselves up for financial failure. Low-income workers who may dip into 401(k) savings out of need are particularly at risk, exacerbating inequality, according to a study from the National Council on Public Employee Retirement Systems (NCPERS). Other countries have far less lenient defined-contribution rules.
How do we respond to the continuing diatribes in local newspapers (editorials) that PERA is dangerously underfunded and should be abolished or taken over by the state legislature. I know this is the last thing that needs to happen, and I know we aren’t underfunded or I wouldn’t be getting my COLA this year. I’d like to be able to refer these people to some legitimate facts/information rather than try to argue with them.
Hello Linda,
Thank you for your question. You might want to consider checking out PERA’s Ambassador Program. One of the benefits of being a PERA Ambassador is being among the first to hear directly from PERA on issues affecting our members. Ambassadors receive timely legislative updates, participate in exclusive telephone conferences with PERA executives, and have an opportunity to represent PERA in their community. Ambassadors play a critical role in PERA’s strategy to communicate the value of PERA to Colorado, from submitting Letters to the Editor to meeting with legislators and other community leaders. Learn more about getting involved to represent PERA locally and being an informed consumer – and communicator – of PERA information.
You may want to consider a significant draw down in you 401k in 2016. If initiative #20 on health care passes in November, the State will impose an additional 10% tax on distributions once the program goes on line. Moving proceeding to a Roth IRA may be a good option. You would have to pay taxes at current and federal and state income tax rates on the full amount, but earnings and withdrawals from an Roth IRA are tax exempt.
You need to be careful about this action, because the extra income could move you to a higher tax bracket and increase your premiums for part Medicare Part B and D, reducing or eliminating the savings.