Retirement insights from a Colorado PERA perspective

A distant view shows a mountainous landscape with sloping peaks, green trees in the foreground, and a cloudy sky above.

The American public continues to hold positive opinions of defined benefit pension plans, according to <a href="https://www.nirsonline.org/reports/what-do-americans-think-about-pensions-for-public-employees/" target="_blank" rel="noreferrer noopener">the latest survey data from the National Institute on Retirement Security</a> (NIRS).



Researchers contacted more than 1,200 adults aged 25 and older across the country to understand public opinion about defined benefit plans like what Colorado PERA offers. They found 86% of survey respondents think all workers should have access to a defined benefit pension, and not just public employees.



In addition, while Americans may be divided politically, the NIRS survey found strong agreement on the value of pensions. More than 80 percent of each political group—Democrats, Republicans, and Independents—voiced their support for pensions.



Unlike a defined contribution plan such as a 401(k), a defined benefit plan like the PERA Defined Benefit Plan provides retirement income a person cannot outlive. That makes for a valuable benefit that can be a powerful tool in maintaining a qualified workforce.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="2428" height="1414" src="https://content.copera.org/wp-content/uploads/2024/11/nirs-american-attitudes-on-pensions.png" alt="Two pie charts showing results of a survey of Americans' attitudes toward pensions. The left chart shows 82% of Americans agree that pensions are a good way to recruit and retain qualified teachers. The right chart shows 84% of Americans agree that pensions are a good way to recruit and retain qualified public safety employees." class="wp-image-54938" srcset="https://content.copera.org/wp-content/uploads/2024/11/nirs-american-attitudes-on-pensions.png 2428w, https://content.copera.org/wp-content/uploads/2024/11/nirs-american-attitudes-on-pensions-300x175.png 300w, https://content.copera.org/wp-content/uploads/2024/11/nirs-american-attitudes-on-pensions-1024x596.png 1024w, https://content.copera.org/wp-content/uploads/2024/11/nirs-american-attitudes-on-pensions-768x447.png 768w, https://content.copera.org/wp-content/uploads/2024/11/nirs-american-attitudes-on-pensions-1536x895.png 1536w, https://content.copera.org/wp-content/uploads/2024/11/nirs-american-attitudes-on-pensions-2048x1193.png 2048w" sizes="(max-width: 2428px) 100vw, 2428px" /><figcaption class="wp-element-caption">Image courtesy: National Institute on Retirement Security</figcaption></figure>



Defined benefit plans are most common in the public sector today, and the NIRS survey asked respondents whether they agreed that pensions are a valuable tool to recruit and retain workers who provide important public services, such as teachers and public safety workers. The survey found 82% agree that pensions help recruit and retain teachers and 84% agree that they help recruit and retain public safety workers.



Since 1931, Colorado PERA has been helping support Colorado’s public workforce by providing lifetime retirement and other benefits. In addition to the PERA Defined Benefit Plan, PERA members have access to defined contribution plans, health care benefits, and more, ensuring the state’s public workers have the tools they need for a secure retirement.

Survey Finds Strong Support for Public Pensions

<h4 class="wp-block-heading"><a href="https://www.copera.org/news-you-should-know-will-private-sector-pensions-make-a-comeback" target="_blank" rel="noreferrer noopener">Could Defined-Benefit Pension Plans Make a Comeback? | Morningstar</a></h4>



Decades ago, it was much more common for workers in the private sector to have access to defined benefit retirement plans. Today, they’re largely only available to public employees. However, some experts say the time is right to consider reopening some of those closed or frozen plans, especially as companies struggle to hire and retain employees.



<h4 class="wp-block-heading"><a href="https://www.cnn.com/2023/03/20/politics/biden-first-veto/index.html" target="_blank" rel="noreferrer noopener">Biden Issues His First Veto on Retirement Investment Resolution | CNN Politics</a></h4>



President Joe Biden issued the first veto of his presidency this month, vetoing a congressional resolution that would have overturned a Department of Labor rule allowing — but not requiring — retirement plans to consider financially relevant environmental, social, and governance (ESG) factors in their investment decisions. <a href="https://peraontheissues.com/esg-making-sense-of-alphabet-soup/">Click here</a> to read about PERA’s integrative approach to investment stewardship and ESG.



<h4 class="wp-block-heading"><a href="https://www.marketplace.org/2023/03/21/consumer-confidence-is-up-despite-current-bank-troubles-will-it-last/" target="_blank" rel="noreferrer noopener">Consumer Confidence is Up Despite Current Bank Troubles — Will It Last? | Marketplace</a></h4>



Recent turmoil in the banking industry, rising interest rates and other financial issues haven’t had much effect on personal spending so far. But there are some signs that that could soon change, with recent polling showing some declines in consumer sentiment about the economy.



<h4 class="wp-block-heading"><a href="https://www.cnbc.com/2023/03/11/how-to-live-well-past-100-superager-sisters-on-longevity-health-tips.html" target="_blank" rel="noreferrer noopener">100-Year-Old Sisters Share 5 Top Tips for Leading a Long, Happy Life | CNBC</a></h4>



Shirley Hodes and Ruth Sweedler are 106 and 103, respectively, and still going strong. What are the key ingredients for living so long? There&#8217;s no secret sauce here, but some simple reminders about living a healthy life.



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News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

News You Should Know: Will Private Sector Pensions Make a Comeback?

<h4 class="wp-block-heading"><a href="https://www.alaskajournal.com/2023-02-21/alaska-public-worker-shortage-fuels-renewed-interest-pension-plan" target="_blank" rel="noreferrer noopener">Alaska Public Worker Shortage Fuels Renewed Interest in Pension Plan | Alaska Journal of Commerce</a></h4>



Defined benefit pension plans can be a valuable tool in recruiting and retaining public employees like teachers and public safety officers. Recognizing that, lawmakers in Alaska this year are continuing their efforts to re-establish a pension plan similar to the one the state closed in 2006. They hope to stop a worsening trend of public workers leaving Alaska for jobs in other states that offer better benefits.



<h4 class="wp-block-heading"><a href="https://www.investopedia.com/401-k-and-ira-balances-plunged-in-2022-7113335" target="_blank" rel="noreferrer noopener">401(k) and IRA Balances Plunged Over 20% in 2022 | Investopedia</a></h4>



2022 was a tough year in the markets, and workers’ retirement accounts were not immune. According to data from Fidelity, the average 401(k) balance was down more than 20 percent for the year, while the average IRA balance dropped by about 23 percent. The good news is that long-term, account balances are still showing good growth, with both 401(k) and IRAs up more than 30 percent over the past decade.



<h4 class="wp-block-heading"><a href="https://news.gallup.com/poll/470894/americans-fairly-satisfied-social-security-system.aspx" target="_blank" rel="noreferrer noopener">Americans Fairly Satisfied With Social Security System | Gallup</a></h4>



Recent polling finds that Americans are split on their feelings about Social Security and Medicare. Forty-five percent of Americans told Gallup they’re satisfied with the programs and 45 percent said they’re dissatisfied. The survey found the groups that are most likely to utilize Social Security and Medicare — those who are older and who make less money — are also the most likely to be satisfied with them.



<h4 class="wp-block-heading"><a href="https://www.nextavenue.org/key-facts-about-life-plan-communities/" target="_blank" rel="noreferrer noopener">Key Facts About Life-Plan Communities | Next Avenue</a></h4>



If you’re planning what you want your later years to look like, or you’re helping a relative find long-term care, you may consider a continuing care retirement community, or life-plan community. These types of communities provide a wide variety of care and support services as you age, from independent living to memory care. Here are some factors to consider when making a decision.



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News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

News You Should Know: Alaska Reconsidering Pension Plan to Fill Public Worker Shortage

Two years into the COVID-19 pandemic, school districts across the country are facing serious shortages of qualified teachers and other staff, and those shortages have led to widespread concern.



In <a href="https://www.nirsonline.org/wp-content/uploads/2022/02/FINAL-2022-Americans-Views-of-Public-School-Teachers-.pdf" target="_blank" rel="noreferrer noopener">a recent survey from the National Institute on Retirement Security</a> (NIRS), 84 percent of people surveyed said they’re worried about shortages of teachers and school staff, and 81 percent said they’re worried about people leaving the profession.



The educator shortage was the topic of a recent forum held by the <a href="https://www.pebc.org/" target="_blank" rel="noreferrer noopener">Public Education and Business Coalition</a> (PEBC), a Denver-based organization that works with school districts, teachers and business leaders across the country to improve public education. Colorado PERA was a sponsor of PEBC’s Colorado Education Workforce Forum.



At the forum, state education officials, district superintendents and business leaders came together to discuss the sobering reality of Colorado’s educator shortage and brainstorm solutions.



<figure class="wp-block-image size-large"><a href=""><img decoding="async" src="https://content.copera.org/pensions-a-valuable-tool-in-efforts-to-solve-teacher-shortages/"" class="wp-image-5046"/></a><figcaption>Image credit: Public Education and Business Coalition</figcaption></figure>



In the 2020-2021 school year, there were nearly 7,000 teaching positions to fill in Colorado, but only about 3,000 graduates from teaching programs, according to PEBC. In addition, school districts across the state are dealing with a 16 percent turnover rate and per-student funding that’s well below the national average.



Teacher pay is a major factor in discussions about shortages, and so are benefits — particularly retirement benefits. In the NIRS survey, 90 percent of respondents agreed that teachers and school staff should have access to a pension for retirement security, and 94 percent agreed that elected officials should ensure those pensions are adequately funded.



<h4 class="wp-block-heading">The role of Colorado PERA in attracting and retaining teachers</h4>



Decades ago, it was common for many workers to receive a defined benefit (DB) retirement plan — also known as a pension — from their employer. Today, public employees like teachers and other school employees are among the few who still have access to DB plans. Most other workers have to rely on defined contribution (DC) plans like 401(k)s to save for retirement.



<blockquote class="wp-block-quote">Related: <a rel="noreferrer noopener" href="https://peraontheissues.com/states-consider-reviving-closed-pensions-in-effort-to-recruit-retain-public-workers/" target="_blank">States Consider Reviving Closed Pensions in Effort to Recruit, Retain Public Workers</a></blockquote>



PERA’s hybrid&nbsp;defined benefit&nbsp;plan is a particularly strong recruitment and retention tool because of the value it offers to employees regardless of the length of their career. PERA’s plan design has evolved to serve both long-service employees as well as those who only work for a short time in public employment. For example, every dollar a PERA member contributes to their account is theirs, and they can take those funds with them when they leave PERA-covered employment. This plan design benefits Colorado’s public employees, their employers and the valuable services delivered to Colorado taxpayers.



In the 2022 legislative session that just wrapped up in May, Colorado lawmakers tackled the issue of educator shortages with <a href="https://co.chalkbeat.org/22899633/colorado-education-school-bill-tracker-2022" target="_blank" rel="noreferrer noopener">a number of bills</a> to increase public school funding. They also <a href="https://peraontheissues.com/2022-proposed-legislation-status/" target="_blank" rel="noreferrer noopener">passed two bills</a> that allow some PERA retirees to return to work in school districts dealing with critical shortages.



Solving the teacher shortage in Colorado and elsewhere will require creativity and commitment, and Colorado PERA remains a valuable tool for school districts looking to hire and keep qualified educators.

Pensions a Valuable Tool in Efforts to Solve Teacher Shortages

In the past two decades, several states have closed their defined benefit (DB) pension plans to state and local government employees and moved those workers to defined contribution (DC) plans like 401(k)s instead. But some of those states are now considering reversing course as they recognize the value of DB plans in recruiting and retaining qualified workers.



Alaska closed its DB plan to new state employees in 2006 over concerns about the plan’s unfunded liability. Since then, the state has struggled to hire and keep teachers, state troopers and other public employees. Those workers often receive their training and then leave for other states that offer better retirement benefits, <a href="https://www.alaskasnewssource.com/2022/02/04/facing-retention-crisis-alaska-legislature-considers-more-generous-first-responder-retirement-scheme/" target="_blank" rel="noreferrer noopener">according to officials</a>. And that frequent turnover can have a high cost: It costs nearly $200,000 to recruit, train and certify a single state trooper, <a href="https://dps.alaska.gov/getmedia/ca76d118-d1ca-43c4-85be-49600a4fb8d0/Recruitment-Retention-Plan-Overview-2018-2023" target="_blank" rel="noreferrer noopener">according to a report</a> from the Alaska Department of Public Safety.



Alaska’s lawmakers <a href="https://www.ktoo.org/2022/04/04/alaska-legislators-consider-reviving-pensions-for-public-employees/" target="_blank" rel="noreferrer noopener">are now considering legislation</a> that would reopen the DB plan and thereby reduce the high costs associated with turnover and constantly hiring and training new employees.



It’s a similar situation in Oklahoma, which shifted some of its state employees to a DC plan in 2014. Its legislature <a href="https://www.ocpathink.org/post/house-votes-to-roll-back-oklahoma-pension-reforms" target="_blank" rel="noreferrer noopener">is also considering reversing course</a> and putting those workers back on a DB plan.



Pensions have long been seen as a valuable tool to help hire and keep teachers, state employees and other government workers, since most private employers do not offer DB plans and the reliable source of retirement income that comes with them. Research also shows that amid widespread concerns about retirement security, Americans from every generation <a href="https://peraontheissues.com/survey-millennials-gen-x-especially-pessimistic-about-retirement-prospects/" target="_blank" rel="noreferrer noopener">value defined benefit pensions</a> and believe every worker should have access to one.



States like Colorado provide strong evidence that defined benefit plans continue to help attract and retain teachers and other public employees. According to <a href="https://www.nirsonline.org/wp-content/uploads/2019/01/Teacher-Pension-vs-401ks-in-Six-States_FINAL.pdf" target="_blank" rel="noreferrer noopener">research from the National Institute on Retirement Security</a>, 65 percent of teachers in Connecticut, Colorado, Georgia, Kentucky, Missouri and Texas — all of which offer DB plans — serve for at least 20 years.



<h4 class="wp-block-heading">Colorado’s commitment to PERA</h4>



Over the past decade-plus, Colorado lawmakers have indicated they remain committed to strengthening PERA so the state’s public workers can continue to rely on a defined benefit pension for retirement security.



In 2010, the Colorado General Assembly passed <a rel="noreferrer noopener" href="https://content.copera.org/states-consider-reviving-closed-pensions-in-effort-to-recruit-retain-public-workers/" target="_blank">Senate Bill 10-001</a>, which contained a number of reforms to improve PERA’s funded status and sustainability, with a focus on preserving the Defined Benefit Plan. Five years after SB10-001, the state <a rel="noreferrer noopener" href="https://peraontheissues.com/poked-prodded-and-perused-pera-passes/" target="_blank">commissioned a study</a> to compare PERA with other plan types, such as defined contribution plans. That study concluded PERA’s hybrid defined benefit plan was the most cost-effective, efficient plan available, and provides more income at retirement than the alternative plan designs for all ages and career paths. Another package of reforms then followed in 2018 with <a rel="noreferrer noopener" href="https://www.copera.org/states-consider-reviving-closed-pensions-in-effort-to-recruit-retain-public-workers" target="_blank">Senate Bill 18-200</a>.



Changes resulting from those two pieces of legislation include increased member and employer contributions, reductions in the Annual Increase paid to benefit recipients, introduction of the <a rel="noreferrer noopener" href="https://www.copera.org/states-consider-reviving-closed-pensions-in-effort-to-recruit-retain-public-workers" target="_blank">Automatic Adjustment Provision</a> and a direct distribution from the State budget of $225 million, to be paid to PERA annually. While the legislature opted to forgo 2020’s payment due to unprecedented pandemic-related budget cuts, <a rel="noreferrer noopener" href="https://peraontheissues.com/2022-proposed-legislation-status/" target="_blank">efforts are underway</a> to make up that payment.



While the changes to member and employer contributions and Annual Increases haven’t been easy, they ensure that PERA’s Defined Benefit Plan will be able to continue providing reliable retirement income that retirees can’t outlive.



Ensuring that PERA is sustainable allows school districts, local governments, public safety departments and other government agencies to continue to attract highly qualified, skilled employees and retain their expertise for years to come.

States Consider Reviving Closed Pensions in Effort to Recruit, Retain Public Workers

A <a href="https://www.nirsonline.org/reports/betterbang3/" target="_blank" rel="noreferrer noopener">recent study</a> from the National Institute on Retirement Security found that defined benefit (DB) pensions like Colorado PERA’s continue to offer substantial cost savings over defined contribution (DC) accounts like 401(k)s.



The research affirms NIRS’s findings from 2008 and 2014 that DB plans can provide retirement benefits at about half the cost (49 percent) of the typical DC plan.



The cost savings come from key differences in how DB and DC plans work, the authors state. In particular, they highlight the following three advantages of DB plans:



<ul>
<li>Longevity risk-pooling: Defined benefit plans cover a large number of people, with each person’s benefits coming from the same trust fund. For that reason, DB plans only have to accumulate enough money to fund benefits for the average life expectancy of the group. An individual in a defined contribution plan, on the other hand, has to accumulate enough funds to cover their expenses for the rest of their life, including the possibility of living longer than their life expectancy. That means a DC account needs to have a higher balance at retirement in order to provide the same level of benefits as the DB plan.</li>



<li>Maintenance of portfolio diversification: Individuals in DC plans are typically encouraged to shift their portfolio to a more conservative, or lower-risk, mix of investments as they get older to protect their balance from drops in the stock market. A DB plan, with its shared trust fund, can maintain a well-balanced portfolio over the long term and weather short-term risks in the stock market, ultimately earning higher returns.</li>



<li>Lower fees and professional management: Because of the pooled nature of DB plans, the fees for managing investments are shared by the group and are lower than the typical DC plan, in which each individual pays fees on their account. In addition, DB plan investment managers have a fiduciary duty — they must make decisions to ensure the longevity of the fund — while individual investors in DC plans may not have the expertise to make the right decisions.</li>
</ul>


<div class="wp-block-image">
<figure class="alignright size-full"><a href=""><img decoding="async" src="" alt="" class="wp-image-4804"/></a><figcaption class="wp-element-caption">Image credit: National Institute on Retirement Security (click to enlarge)</figcaption></figure></div>


Simply put, a person saving for retirement in a DC plan needs to save more money than the typical DB plan. Overall, the authors conclude that it is about twice as expensive to save for retirement under a DC plan like a 401(k) than it is with a DB pension plan.



Both DB and DC plans have their advantages, and Colorado PERA offers both, with some members having the ability to choose whichever plans works best for them. PERA offers all of its members a hybrid defined benefit plan that gives members increased flexibility and additional options, whether through a monthly lifetime benefit or complete portability to another retirement plan. PERA members can also supplement their retirement savings with a <a href="https://www.copera.org/peraplus-401-k-457-plans" target="_blank" rel="noreferrer noopener">401(k) or 457 plan</a>. 



It’s a powerful retirement tool that adapts to the many different paths people take in public service: whether working part-time or full-time, whether planning on a long tenure or a short one, and whether near retirement or far from it. <a href="https://www.copera.org/new-members-in-the-defined-benefit-plan" target="_blank" rel="noreferrer noopener">Click here</a> to learn more about PERA’s defined benefit plan.

Study: Defined Benefit Pensions Continue to Be More Cost-Effective Than 401(k)s

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Staying the course is a powerful concept in investing. But when the market is as choppy as we saw last year, staying the course is often easier said than done. According to a recent report from Vanguard, one group of people stands out for their ability to do….well, nothing. Just about everyone (96%) with a target-date fund in a retirement account at Vanguard didn&#8217;t make a trade in those accounts last year. Target-date funds let individuals invest in a single fund that is optimized for a specific date, like retirement. These funds contain an array of asset classes (stocks, bonds, etc.) that automatically decrease risk as the investor nears that date. (PERAPlus investors have access to <a href="https://copera401k.voya.com/einfo/fundinfo.aspx?cl=CORADO&amp;pl=650301PU&amp;page=investment_informationfundperformance&amp;s=&amp;d=139350e7368e378d6f4496c683ba94fa190f1047" target="_blank" rel="noreferrer noopener" class="broken_link">target-date funds</a>, too).



<h4 class="wp-block-heading"><a href="https://squaredawayblog.bc.edu/squared-away/heres-why-people-dont-save-enough/" target="_blank" rel="noreferrer noopener">Here’s Why People Don’t Save Enough</a> | Squared Away</h4>



The majority of older American workers and retirees say they wished they had saved more for retirement. A recent study asks an important follow-up question: “what happened?” Was it procrastination? Lack of access to retirement savings accounts? Economic hardships? Older Americans said that, in hindsight, unemployment and underemployment were the biggest barriers that stood between them and saving more.



<h4 class="wp-block-heading"><a href="https://www.barrons.com/articles/financial-decision-making-worsens-with-age-heres-how-to-help-your-future-self-51623446257" target="_blank" rel="noreferrer noopener">Financial Decision Making Worsens With Age. Here’s How to Help Your Future Self.</a> | Barron’s</h4>



“Think about your future self.” This is common advice handed out to people who are employed and saving for retirement (or not). This kind of thought experiment involving future you continues to be useful even after you retire. Thinking about yourself as an 85-year-old retiree when you’re a new retiree in your 60s can make a huge difference later. This article walks through some examples of why this is a helpful way to plan, and what to do to get started.



<h4 class="wp-block-heading"><a href="https://crr.bc.edu/briefs/2021-update-public-plan-funding-improves-as-workforce-declines/" target="_blank" rel="noreferrer noopener">2021 Update: Public Plan Funding Improves as Workforce Declines</a> | Center for Retirement Research</h4>



Across the country, public pensions saw investments rebound from a brutal spring to finish strong. However, negative employment trends tempered some of the benefits of a good investment year. &nbsp;



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News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

News You Should Know | Target-date savers sat tight in 2020

A digest of news from publications around the nation about finance, investing, and retirement.



<a href="https://money.com/esg-investing-criteria/" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Investors Love &#8216;Socially Responsible&#8217; Companies. But Sorting the Good from the Bad Is Harder Than It Looks</a> | <a href="http://www.money.com" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Money</a>



ESG funds—those that screen investments for environmental, social, and governance factors—have risen in popularity in the past few years. But distinguishing “good” from “bad” can quickly become complicated. Black and white quickly become gray when assessing global companies with dozens or hundreds of product lines, clients, and supply chains. One researcher compared various ESG funds and found an average correlation of 0.54. This suggests that, while the concept of ESG is gaining popularity, finding a consistent model to implement is not as easy as ABC.



<a aria-label="undefined (opens in a new tab)" href="https://www.ai-cio.com/news/us-public-pensions-bounce-back-dismal-first-quarter/" target="_blank" rel="noreferrer noopener">US Public Pensions Bounce Back from Dismal First Quarter</a> | <a aria-label="undefined (opens in a new tab)" href="https://www.ai-cio.com/" target="_blank" rel="noreferrer noopener">Chief Investment Officer</a>



You might have heard the term “V-shaped recovery” (a recovery that’s as swift as the decline) when experts discuss the future of the economy. While many components used to measure the economy have not fully recovered, like the unemployment rate, many investors have seen their portfolios recoup much of their earlier losses, including many public pensions. The 100 largest public pension systems regained $308 billion in market value between March and July. Experts quoted in the article state that, despite the quick market recovery, the future remains uncertain.



<a href="https://content.copera.org/retirement-roundup-esg-is-easier-said-than-done/" target="_blank" label="undefined (opens in a new tab)" rel="noreferrer noopener">Take this Social Security quiz and see if you are smarter than the average American</a> | <a href="http://cnbc.com" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">CNBC</a>



Social Security is a program entirely separate from PERA. However, many PERA members rely on their own or a spouse’s Social Security benefit to some extent in retirement. Understanding Social Security is not easy according to a 12-question poll conducted by insurance company MassMutual. One in two respondents received a grade of D or F when asked true-false questions about the program. How does your knowledge stack up against the average?



<a href="https://www.forbes.com/sites/suzytaherian/2020/07/17/the-dirty-dozen-tax-scams-of-2020/#458c449734a1" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">The ‘Dirty Dozen’ Tax Scams Of 2020: $27 Billion Hit To Business</a> | <a href="http://www.forbes.com" target="_blank" aria-label="undefined (opens in a new tab)" rel="noreferrer noopener">Forbes</a>



Tax scams peak after tax day, which was delayed until July 15 this year. Last year, the FBI received about 300,000 complaints about possible scams, though they suspect that if every scam were reported that number would be closer to 20 million. This article summarizes common scams so you can be better prepared to spot them. Nobody thinks they’ll be scammed, but the truth is that scams cost Americans billions every year.

Retirement Roundup: ESG is Easier Said Than Done

Retirement Roundup: A digest of news from publications around the nation about finance, investing, and retirement 



<a href="https://content.copera.org/retirement-roundup-only-half-of-gen-xers-have-a-retirement-account/">Only half of Gen Xers have a retirement account, and that&#8217;s a catastrophe in the making</a> | <a href="https://www.businessinsider.com">Business Insider</a>



Millennials may bear the brunt of bad press, but Gen X is arguably in worse financial shape. Insider recently teamed up with Morning Consult to survey 2,096 Americans about their financial health, debt, and earnings for its new series, &#8220;The State of Our Money.&#8221; According to the survey, exactly half of Gen Xers, defined as ages 39 to 54 this year, don&#8217;t have a retirement savings account. That&#8217;s only slightly less than the 54 percent of millennial respondents who don&#8217;t have one, and it’s particularly concerning considering the three-decade span between the youngest millennials and oldest Gen Xers.



<a href="http://money.com/money/5656920/discount-drug-cards-promise-huge-savings-on-your-prescriptions-but-is-there-a-catch/" class="broken_link">Discount drug cards promise huge savings on your prescriptions. But is there a catch?</a> | <a href="http://money.com">Money</a>



Discount prescription cards promote savings of up to 80 percent off prescriptions by simply waving a free plastic card (or your phone) in front of the cashier at the pharmacy. Completely separate from your health insurance, they are more like convenient online coupons for prescription medications. They are generally free and have no additional fees. But keep in mind that insurance and discount cards cannot be used at the same time for the same purchase. You can use one or the other, deciding which is better on a case-by-case basis.



[Open Enrollment ends on November 7. Learn more about PERACare for Retirees – 2020 <a href="https://content.copera.org/retirement-roundup-only-half-of-gen-xers-have-a-retirement-account/">here</a>.] 



<a href="https://homehealthcarenews.com/2019/10/in-home-care-costs-rising-faster-than-any-other-long-term-care-setting%EF%BB%BF/">In-home care costs rising faster than any other long-term care setting</a> | <a href="https://homehealthcarenews.com">Home Health Care News</a> Home-based care is often lauded as an affordable — and preferable — alternative to skilled nursing care. But that characterization could be changing, as in-home care costs are skyrocketing to become more expensive than ever. That’s according to the latest annual <a href="https://www.genworth.com/aging-and-you/finances/cost-of-care.html">Genworth Cost of Care Survey</a>, which tracks the cost of various forms of long-term care nationwide, including home care, home health, adult day services, assisted living and skilled nursing.



<a href="https://www.nerdwallet.com/article/investing/will-you-get-what-social-security-promises">Will you get what Social Security promises?</a> | <a href="https://www.nerdwallet.com">NerdWallet</a>



The Social Security Administration will happily forecast your future monthly retirement check. Trouble is, it’s often off the mark. Understanding the sometimes-flawed assumptions underlying the estimate can help you make smarter decisions about when to claim your benefit. For people who worked at certain government agencies or were employed abroad and get pensions from jobs that didn’t pay into Social Security, the “windfall elimination provision” could reduce their Social Security checks significantly. Lawmakers intended the provision, and the related “government pension offset,” to keep people who didn’t pay much into Social Security from getting more than those who did. But the reductions aren’t always well publicized or explained, and can come as a shock to affected people who were counting on the amounts Social Security promised.



<a href="https://www.marketwatch.com/story/ge-freezes-its-pension-plans-and-offers-former-employees-lump-sum-buyouts-2019-10-23">Opinion: GE freezes its pension plans and offers former employees lump sum buyouts</a> | <a href="https://www.marketwatch.com">MarketWatch</a>



In the face of declining profits, General Electric (GE) recently announced that, to help reduce the company’s debts, it will freeze its pension plan for about 20,000 salaried employees and offer lump-sum payments to about 100,000 former employees who have not started receiving benefits. The offer to “un-annuitize,” or provide lump-sum payouts, is concerning to advocates for automatic annuitization of at least some portion of 401(k) balances. Retirees with ongoing monthly pension benefits are much more secure than those who have to decide how to allocate their retirement assets over an uncertain lifespan. With traditional pensions, retirees will not outlive their benefits and do not have to worry about the ups and downs of the stock market.

Retirement Roundup: Only half of Gen Xers have a retirement account

<h5 class="wp-block-heading">Retirement Roundup: A
digest of news from publications around the nation about finance, investing,
and retirement</h5>



<a href="https://www.marketwatch.com/story/why-is-it-still-so-hard-for-women-to-save-for-retirement-2019-10-01">Why is it still so hard for women to save for retirement?</a> | <a href="https://www.marketwatch.com">marketwatch.com</a>



Working baby boomer men contribute 10 percent to their
401(k) while baby boomer women contribute 7 percent. For millennial men and
women, the median rates are 8 percent and 5 percent, respectively. What gives?
Pew Research Center shows that more women than men take “significant” time off
from a career to care for children. Time out of the workplace can dampen
long-term salary. Even when women are in a position equal to a male
counterpart, women on average earn less. 



<a href="https://www.npr.org/2019/10/02/751797229/the-new-realities-of-work-and-retirement">Older
Americans Are Increasingly Unwilling — Or Unable — To Retire</a> | <a href="https://www.npr.org/">npr.org</a>



About one in four adults age 65 and older still work, a number that experts expect to rise. Multiple factors are behind this trend. First, fewer private-sector jobs offer defined benefit pension plans. If a retiree relies solely on a 401(k), which is driven by market returns, a recession or down period near a person’s ideal retirement date could force them to work longer. Second, about half of older Americans use retirement savings to financially support grown children. Third, the median savings for baby boomers is about $150,000. Finally, nearly half of private sector employers don’t offer employees any type of retirement plan.



<a href="https://www.investopedia.com/ask/answers/041015/what-rate-return-should-i-expect-my-401k.asp">What
Rate of Return Should I Expect on My 401(k)?</a> | <a href="https://www.investopedia.com">investopedia.com</a>



When planning for the future, we all must make educated
guesses. If you have a 401(k) or 457, a tough but crucial question to ask is
“how will my investments do in the next 10, 15, 20 years?” If the sum of all
your investments breaks down to about 60 percent stocks and about 40 percent
bonds, the average long-term return people often use often lands in the range
of 5 to 8 percent. Of course, in any single year, your returns might be
significantly above or below that range. 



<a href="https://www.governing.com/topics/mgmt/4-Best-Practices-to-Address-the-Pension-Crisis.html">4
Best Practices to Address the Pension Crisis</a> | <a href="https://www.governing.com">governing.com</a> 



As people live longer and as pension systems adopt more conservative investment assumptions, unfunded liabilities have grown in more than 4,000 public sector pensions. This article suggests that while each pension system requires a unique plan to move forward, the best plans share some common traits: Using a “shared sacrifice” model is often most effective, rigorously stress testing the pension’s portfolio to see how it would perform, and phasing in changes over time.



<a href="http://money.com/money/5657075/schwab-commission-free-trades/" class="broken_link">Charles
Schwab Just Made Stock Trading Free. Here&#8217;s Why That Might Be Bad News for
Investors</a> | <a href="http://money.com">Money.com</a>



Citing its large user base and advances in technology that make trading more efficient, Charles Schwab announced it will no longer charge to buy or sell stocks and exchange-traded funds online. Other companies have since followed suit. Lower costs are a win for consumers. However, for investors, commission-free trades might incentivize overtrading, adversely affecting long-term returns. While sophisticated traders have the time and tools to trade at a high frequency, many investors are better off buying and holding a diversified set of funds, or a single target-date retirement fund, for the long term.

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