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.

In this story:



<ul>
<li>Members of Generation X and Millennials are more concerned than other generations about their ability to save enough for retirement</li>



<li>Younger generations are also more likely to be worried about the effects of the pandemic on their retirement planning</li>



<li>Generations agree on the value of defined benefit plans like Colorado PERA</li>
</ul>



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A <a href="https://www.nirsonline.org/reports/generations/" target="_blank" rel="noreferrer noopener">recent survey</a> by the National Institute on Retirement Security found that Americans who fall into the Generation X and Millennial categories are more pessimistic than older generations about their retirement prospects and are more likely to be concerned about how the COVID-19 pandemic might have affected their retirement plans.



The survey also found the various age groups have some important points of agreement, including the overall state of retirement security and the need for greater access to retirement plans like those offered by Colorado PERA.



<h4 class="wp-block-heading">Where the generations differ in retirement outlooks</h4>



The National Institute on Retirement Security surveyed 1,203 people in December 2020. For the purpose of the survey, Millennials were defined as those who were 25 to 43 years old, Generation X as 44 to 55 years old, Baby Boomers as 56 to 74, and the Silent Generation as anyone 75 and older.



NIRS found that while the generations agree that there’s a retirement crisis in the United States, Generation X and Millennials have generally more pessimistic views of the situation. Seventy-two percent of Millennials and 59 percent of Generation X said they’re concerned about achieving a financially secure retirement, versus 43 percent of Baby Boomers and 26 percent of the Silent Generation.



Additionally, 64 percent of Millennials and 54 percent of Generation X said they’re more concerned about their retirement in light of the COVID-19 pandemic, while 42 percent of Boomers and 25 percent of the Silent Generation said the same.



The younger generations were also far more likely to have dipped into their emergency or retirement savings during the pandemic, according to the survey.



<h4 class="wp-block-heading">Where the generations agree</h4>



The <a href="https://www.nirsonline.org/reports/generations/" target="_blank" rel="noreferrer noopener">NIRS survey</a> found broad agreement across the generations on the challenges workers face while saving for retirement, with large majorities of each group saying the average worker cannot save enough money for retirement on their own.



The four generations also agree that it’s important to provide for retirees. Majorities of each group support Social Security and would be in favor of increasing contributions. Each group also agreed on the importance of defined benefit retirement plans, also known as pensions, which provide retirees with a lifetime benefit they can’t outlive. Eighty-one percent of Millennials described their views of pensions as favorable, and 68 percent of the Silent Generation said the same. All four generations agreed that every American worker should have access to a pension plan.



<h4 class="wp-block-heading">Where PERA factors in</h4>



In Colorado, the state’s largest workforce — public employees like state workers, teachers, corrections officers, snow plow drivers and others who serve our state — has access to a pension through Colorado PERA.<ins></ins>



PERA is a <a href="https://content.copera.org/survey-millennials-gen-x-especially-pessimistic-about-retirement-prospects/" target="_blank" rel="noreferrer noopener">hybrid defined benefit plan</a>, providing a defined benefit pension to most members and offering a choice between the defined benefit plan and defined contribution plan to others. Of those given the choice between the DB and DC plans, 9 out of 10 choose the DB option.



The average PERA member retires at approximately 59 years old and lives until their early 80s, receiving benefit payments from PERA every month while they’re retired. In 2020, PERA paid more than $4.2 billion in pension benefits to more than 107,000 retirees living in Colorado, with an average monthly benefit of $3,204. At a time when many workers are anxious about their ability to save enough for retirement, defined benefit plans like PERA not only provide peace of mind in retirement, they also serve as an effective recruiting tool for public employers looking to attract and retain employees.

Survey: Millennials, Gen X Especially Pessimistic About Retirement Prospects

<a href="https://www.kff.org/health-costs/report/2020-employer-health-benefits-survey/" target="_blank" rel="noreferrer noopener">2020 Employer Health Benefits Survey</a> | Kaiser Family Foundation



This survey is geared toward employers who provide health insurance to employees. But the findings are eye-opening for individuals, too. They illustrate why the average American worker who retires before Medicare age faces sticker shock when shopping for health insurance. 



In 2019, employees paid an average of $5,588 annually ($465 monthly) in premiums for family coverage through their employers. Employers, meanwhile, chipped in a staggering $15,754 ($1,312 monthly). Combined, family coverage ended up costing $21,342 per year ($1,778 monthly). 



That employer contribution can obscure the overall cost of coverage. That, in turn, can explain why prices seem to jump so much when moving from employment to retirement. The overall price likely didn’t change too much. Instead, it&#8217;s losing the employer contribution that leads to the big jump in prices early retirees see.



<a href="https://www.forbes.com/sites/advisor/2020/10/06/studies-confirm-that-half-of-americans-struggle-with-retirement/#2559f98b6f9f" target="_blank" rel="noreferrer noopener">Studies Confirm That Half Of Americans Struggle With Retirement</a> | Forbes



Retirement experts have been warning about a retirement crisis for decades. That prediction is turning into an observation. For the next two decades, 10,000 people will blow out 65 candles on their birthday cakes—every single day. 



Despite the drumbeat of warnings, about half of employees “are concerned with their household’s financial wellbeing.” And half of households “are in danger of lacking sufficient funds to continue their standard of living once they stop working.” This article explores why. (Note: it focuses on those who rely on defined contribution accounts for retirement).



<a href="https://content.copera.org/news-you-should-know-the-total-cost-of-health-insurance/" target="_blank" rel="noreferrer noopener">The case for a retirement roommate</a> | NNY360



The cost of renting is going up. And more than 40 percent of people age 65 and above live alone. Why not address both issues at once? 



This author makes the case that more retirees should consider finding a roommate. Not only can it make financial sense, but having a roommate can also fend off one of the biggest risks retirees face: social isolation. It might not be for everyone, but it could be a great solution for many. In fact, one room-renting website reported that the number of users over 50 is growing twice as fast as other demographics.



<a href="https://www.kiplinger.com/retirement/medicare/601482/medicare-from-soup-to-nuts" target="_blank" rel="noreferrer noopener">How to Pick the Right Medicare Plans for You</a> | Kiplinger



October is open enrollment time. For those looking for Medicare plans, navigating the options can be tricky. There are many parts (A, B, D) to consider, doughnut holes to avoid, and more. This article is an overview of what you need to know when assessing your needs and the available options. 



(Note: PERA retirees have multiple Medicare insurance plans available through PERACare. During the month of October, you can attend a <a href="https://content.copera.org/news-you-should-know-the-total-cost-of-health-insurance/" target="_blank" rel="noreferrer noopener">virtual meeting</a> to learn more about how these plans work.)







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

News You Should Know: The Total Cost of Health Insurance

A digest of timely information and insight about finance, investing, and retirement.



<a href="https://www.brookings.edu/blog/up-front/2019/07/15/how-bad-is-the-state-and-local-pension-crisis-really/">How
bad is the state and local pension crisis really?</a>|
<a href="http://www.brookings.edu/">Brookings</a>



State and
local government pension plans hold nearly $4 trillion in assets and provide
retirement income to over 10 million Americans. For most of these plans, the
value of liabilities for future benefit payments exceed the value of plan
assets. <a href="https://www.federalreserve.gov/econres/byron-lutz.htm">Byron Lutz</a> of the Federal Reserve Board, and <a href="https://www.brookings.edu/experts/louise-sheiner/">Louise Sheiner</a> of Brookings focus on the sustainability of pension
plans—whether plans will run out of assets and need to borrow money or be
bailed out to meet benefit obligations. In a paper presented at the 2019 <a href="https://www.brookings.edu/events/8th-annual-municipal-finance-conference/">Municipal Finance Conference</a> at Brookings, they conclude,
in short, that, on the whole, state and local pension systems in the U.S. are
not facing in an imminent crisis.



<a href="https://www.plansponsor.com/calsavers-state-run-retirement-plan-opened/">CalSavers State-Run Retirement Plan Opens</a> | <a href="http://www.plansponsor.com/">PlanSponsor</a>



California State Treasurer Fiona Ma and former State
Senator Kevin de León announced the launch of CalSavers, a state retirement
savings program that will give access to more than 7 million working
Californians who currently lack a workplace plan. State law requires that all
employers with five or more employees who don’t already offer a retirement plan
to either begin offering a qualified plan from the private market or register
for CalSavers over the next three years. 



<a href="http://money.com/money/5649190/you-should-be-saving-at-least-12-of-your-pay-for-retirement-heres-why/" class="broken_link">You
should be saving at least 12% of your pay for retirement. Here’s why.</a>
| <a href="http://money.com/">Money</a>



To
reach retirement in solid financial shape, you likely need to up your savings
game today. Vanguard recommends a total contribution rate of between 12 and 15
percent of salary. But you may want to save even more, depending on your
situation and on how you expect stocks to perform in the future. Researchers’
recommendations vary based on annual income, the age when someone started
saving, and the expected rate of return (after inflation) for a retirement
portfolio.



<a href="https://www.marketwatch.com/story/married-women-more-at-risk-in-retirement-than-singles-2019-06-17">Married women are more at risk in retirement than singles</a> | <a href="http://www.marketwatch.com">MarketWatch</a>



Compared to single women, a greater percentage of married
women are at risk for retirement insecurity, according to a recent <a href="https://crr.bc.edu/briefs/women-marriage-and-the-national-retirement-risk-index/">study</a>
using the National Retirement Risk Index. Forty-six percent of married women
were found to be at risk compared with about 39 percent, on average, for all
single women. The findings highlight the need for two-earner couples to save
more, and the best way to address this issue would to broaden access to
retirement savings plans in the workplace. In addition, plan sponsors could
help educate their married workers about the potential need to save for two.



<a href="https://www.barrons.com/articles/annuities-401k-retirement-savings-51561692333">Annuities in 401(k)s Won’t Solve the
Retirement Crisis. Here’s Why.</a>| <a href="http://www.barrons.com/">Barron’s</a>



Proposed U.S. legislation would make it easier for employers
to offer annuities in <a href="https://www.barrons.com/articles/the-401-k-turns-40-and-like-all-birthdays-theres-good-and-bad-1542404775?mod=article_inline" target="_blank" rel="noreferrer noopener">401(k) retirement plans</a> that provide retirees fixed payments
for as long as they live. The bill, known as the <a href="https://www.barrons.com/articles/house-passes-secure-act-retirement-51558629371?mod=article_inline" target="_blank" rel="noreferrer noopener">Secure Act, passed in the House of Representatives</a> in May and
is now awaiting a vote in the Senate. But since it has bipartisan backing and
is the biggest retirement legislation to gain traction in more than a decade,
it’s widely expected to be approved. While some annuities are low cost, others
come with high commissions and high fees that eat into the benefits.

Retirement Roundup: How bad is the state and local pension crisis really?

Several
states have, or are considering, state-sponsored retirement savings plans for
private-sector employees who do not currently have access to such a plan
through their employer. <a href="https://leg.colorado.gov/bills/sb19-173">Senate Bill 19-173</a> will add
Colorado to that growing list. 



SB
19-173 will examine: 



<ul><li>What would it cost if Colorado does nothing to
help the 45 percent of private sector workers without retirement plans at work
save more for their future?</li><li>Can increasing financial education make a
serious impact on how much Coloradans save?</li><li>Would it make a significant difference to have
a marketplace that offers businesses lower-cost plans?</li><li>Can Colorado follow in other states’ footsteps
to create a universal, portable plan that will allow everyone to automatically
deduct part of each paycheck and deposit that into an IRA?</li></ul>



In
the coming months, State Treasurer (and PERA Trustee) Dave Young will oversee
analysis of these options, and come back to the Legislature in February 2020
with an implementation plan for the best way to fix our state’s retirement
crisis.



State-sponsored
retirement plans are one way states are trying to address the concern that
workers are ill-equipped for retirement. Those without adequate retirement
savings could become a costly burden to states and municipalities if they lack
any financial resources as they age out of the workforce.



The
<a href="https://www.aarp.org/content/dam/aarp/ppi/2017-01/Retirement%20Access%20Race%20Ethnicity.pdf">AARP cites
research</a>
showing that workers are 15 times more likely to save for retirement if they
have access to a payroll deduction savings plan at work. Yet a thorough
analysis of retirement savings readiness from the <a href="http://www.nirsonline.org/">National Institute on Retirement Security</a> found that <a href="https://www.nirsonline.org/wp-content/uploads/2017/07/final_rsc_2015.pdf">many U.S.
workers don’t have access to a workplace retirement plan.</a> In 2013,
nearly half (45.5 percent) of private-sector workers did not have access to a
retirement plan at work. Retirement access in Colorado looks similar to the
rest of the country: <a href="http://www.bellpolicy.org/2016/04/04/solutions-retirement-crisis/">about 45
percent of workers</a> do not have access to retirement savings plans through work,
according to an analysis of U.S. census data from <a href="http://www.bellpolicy.org/2018/03/19/retirement-in-colorado/">The Bell
Policy Center</a>.



Previous
<a href="https://www.brookings.edu/wp-content/uploads/2015/09/structuring-state-retirement-saving-plans.pdf">studies</a> have found
that younger workers, members of minority groups, and those with
low-to-moderate incomes, in particular, have especially low rates of access to
workplace savings plans. Access to retirement plans is particularly prominent
among those working for small businesses.



<a href="https://crr.bc.edu/wp-content/uploads/2016/02/IB_16-4-1.pdf">The Center
for Retirement Research at Boston College</a> cites administrative costs and
concerns, along with uncertain business revenue, high employee turnover, and a
preference for cash wages as different reasons that small businesses, in
particular, do not offer retirement plans.



Several
states have taken the lead and established these retirement savings programs
(see below). Most of these plans include key features that are designed to
encourage retirement savings, such as automatically enrolling employees, using payroll
deduction, and automatically increasing contribution amounts over several
years. Typically, the plans establish IRAs for workers and cover administrative
costs through fees charged to workers’ investment accounts. Generally, the laws
require that all employers, at least with a minimum number of employees, must
participate unless they offer an alternative retirement plan. The plan designs
allow for portability where workers can rollover their savings if they go to
work for an employer that offers a retirement plan or if they move to another
state. The laws establishing these new plans have also included the creation of
oversight authorities that will administer the programs.



The
following information provides a summary of key features of several states’ retirement
savings plans for private sector workers.



State-Sponsored
Savings Plans 



California



<a href="https://www.calsavers.com/">CalSavers</a>,
California’s plan for private-sector retirement savings, is in a pilot stage
and will begin registering employers with five or more employees beginning on
July 1, 2019. By June 29, 2020, all employers with 100 or more workers that do
not offer another retirement savings plan are required to register. Over time, smaller employers will
be required to register, with those with five
or more employees required to register by
June 30, 2022.



Connecticut



The
<a href="https://content.copera.org/colorado-passes-private-sector-retirement-savings-plans-study/">ConnecticutRetirement Security Authority</a> was created in 2016 through an <a href="https://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&amp;which_year=2016&amp;bill_num=5591">act</a> of the
Connecticut General Assembly. Though the law allowed the program to begin
effective January 1, 2018, the program launch <a href="https://www.copera.org/colorado-passes-private-sector-retirement-savings-plans-study" class="broken_link">has beendeferred</a>
to an unspecified future date. The authority <a href="https://www.osc.ct.gov/retirementsecurity/index.html">will
implement a program</a> that will require participation of employers with five or more
Connecticut employees that do not already offer a retirement plan.



Illinois



<a href="https://www.ilsecurechoice.com/">Illinois
Secure Choice</a> launched in early 2018. By November 2018, all Illinois employers
with 500 or more workers that have been in business for more than two years and
do not offer another retirement plan were required to register. All employers
with 25 or more employees
are required to register by November 2019.



Maryland



<a href="https://www.marylandsaves.org/">Maryland
$aves</a>,
designed by a legislative commission and signed into law in 2016, is the
retirement savings plan required of Maryland businesses that do not offer their
own workplace retirement savings. The program is expected to start operations
in late 2019.



New Jersey



The
<a href="https://www.nj.gov/governor/news/news/562019/approved/20190328a.shtml">New Jersey
Secure Choice</a> savings program was signed into law on March 28, 2019. It is
designed to help workers whose employers don’t provide their own retirement
savings plans through automatic payroll deductions. Workers at employers with
25 or more employees will be automatically enrolled in the program.



Oregon



<a href="https://www.oregonsaves.com/">Oregon</a> was the
first state to implement a state-sponsored retirement plan in 2017. By December
15, 2018, all employers with 20 or more workers were required to register with
the plan or certify that they are exempt (already offering an employer-sponsored
retirement plan, such as a 401(k)-type plan). Over time, smaller employers will be required
to register, with those with four or fewer employees required to register by
May 15, 2020.



Washington



<a href="https://www.commerce.wa.gov/growing-the-economy/business-services/small-business-retirement-marketplace/">Washington’s</a> Small
Business Retirement Marketplace, operated by the Washington Department of
Commerce, is a central online platform where pre-screened financial services
firms offer low-cost retirement savings plans to businesses and individuals.
The <a href="http://www.retirementmarketplace.com/">Marketplace</a> is an effort
to simplify the process of finding a retirement savings plan and making it easy
to compare plans that have been approved by the state. 



New York



New
York approved <a href="https://nyassembly.gov/leg/?default_fld=&amp;bn=A08332&amp;term=2015&amp;Summary=Y&amp;Memo=Y&amp;Text=Y">Secure Choice</a> legislation
in 2018 to begin creating a program in 2019.



For
more information:



<a href="https://www.aarp.org/ppi/state-retirement-plans/savings-plans/">Several other
states</a>
are also considering legislation.



<a href="https://www.marketwatch.com/">MarketWatch</a>: <a href="https://www.marketwatch.com/story/state-sponsored-retirement-plans-will-help-more-people-prepare-for-old-age-why-do-they-have-so-many-critics-2019-04-26">State-sponsored
retirement plans will help more people prepare for old age — why do they have
so many critics?</a>

Colorado passes private sector retirement savings plans study

A digest of timely information
and insight about finance, investing, and retirement.



<a href="https://www.denverpost.com/2019/04/06/colorado-voters-retirement-anxiety/">Two-thirds
of Colorado voters anxious about retirement</a> | <a href="https://www.denverpost.com">Denver Post</a> 
About two-thirds of Colorado registered
voters age 25 to 64 describe feeling anxious about having enough money to live
on in retirement, and more than half estimate they are behind schedule in their
retirement savings, according to a survey from <a href="https://www.aarp.org/research/topics/economics/info-2019/colorado-retirement-savings-survey.html">AARP</a>. Those personal concerns are translating into support by a
high margin, 70 percent, for a private-public partnership to offer workers a
retirement savings plan when their employers don’t provide one. Creating a
state-backed retirement plan option is under consideration again in the
legislature this year <a href="https://www.denverpost.com/2017/04/26/state-ira-story/">after past attempts failed.</a>



<a href="https://www.marketwatch.com/story/the-retirement-crisis-is-bad-for-everyone-especially-these-people-2019-04-12">The
retirement crisis is bad for everyone—especially these people</a> | <a href="https://www.marketwatch.com/">MarketWatch</a> 
The country is facing a retirement
crisis, but some Americans are worse off than others. Workers in the top 20
percent of earnings distributions have half of all retirement wealth in both
1992 and 2010, compared with the bottom group, which saw its share fall from 3
percent to 1 percent between those years, a recent analysis at <a href="https://www.economicpolicyresearch.org/insights-blog/the-persistence-of-extreme-retirement-inequality">The
New School’s Schwartz Center for Economic Policy Analysis</a> (SCEPA) found. The share of workers in the bottom
fifth of the earnings distribution with no retirement savings jumped from 45
percent to 51 percent in those 18 years.



<a href="https://www.forbes.com/sites/ebauer/2019/04/04/what-you-need-to-know-about-pension-lump-sums/#76e8db2029fd">What
you need to know about pension lump sums</a> | <a href="https://www.forbes.com">Forbes</a> 
Recently, a news item appeared at CNN:
“<a href="https://www.cnn.com/2019/03/20/economy/lump-sum-pensions-retirement/index.html" target="_blank" rel="noreferrer noopener">It just became easier for employers
to dump retirees’ pensions</a>.” The headline suggests
that employers are simply defaulting on their obligation to pay pension
benefits. The reality is that the Trump administration restored permission to
employers to offer to its retirees, in a time-limited window, the option to
convert their future lifelong annuity pension payments into a single lump sum
payment, a process that some employers had begun to implement but which the
Obama administration had prohibited in 2015.



<a href="https://www.investmentnews.com/article/20190412/BLOG09/190419967/how-behavioral-technology-will-improve-retirement-planning" class="broken_link">How
behavioral technology will improve retirement planning</a> |
<a href="https://www.investmentnews.com">InvestmentNews</a> 
Technology has always been the great disrupter. When robo-advisers came
around, traditional advisers began preparing for battle. Now financial advisers
are largely embracing technology, using it to free them up to be better advisers.
But technology isn’t done evolving. The technology today is most likely more of
a starting line than a finish line. So the question now is: How will the next
generation of financial planning tech look?



<a href="https://content.copera.org/retirement-roundup-two-thirds-of-colorado-voters-anxious-about-retirement/">Retirementplanning: Learning from other people’s mistakes</a> | <a href="https://www.copera.org/retirement-roundup-two-thirds-of-colorado-voters-anxious-about-retirement" class="broken_link">The Street</a> 
Sorrowful tales of ruinous errors with retirement investments are all
too common. Just ask financial adviser Frank Pare. He knows how easy it is to
make financial mistakes with retirement money, whether out of ignorance or
emotional strain. Mishandling the intricacies of finance can lead to horrible
outcomes, he said. Plus, “Trying to make rational decisions under stress” can
bring disaster, he told The Street’s Retirement,
Taxes &amp; Income Strategies Symposium, held recently in New York. 



<a href="https://content.copera.org/retirement-roundup-two-thirds-of-colorado-voters-anxious-about-retirement/">Helpfrom states desperately needed</a> | <a href="https://www.copera.org/retirement-roundup-two-thirds-of-colorado-voters-anxious-about-retirement" class="broken_link">Pensions &#038;Investments</a> 
Pensions &amp; Investments Opinion: We have always
believed that what is best for beneficiaries of retirement plans, whether
defined benefit or defined contribution, is best for the financial services
industry. We have also believed that as many workers as possible should have
access to a retirement plan. This is important for the financial health of
retired workers, but it also contributes to the country’s financial well-being
by increasing the nation’s saving rate. For that reason, we have supported
state efforts to set up state-sponsored private-sector retirement programs. The
nation cannot continue to allow more than 35 percent of full-time
private-sector workers to go without a way to save for retirement in a
tax-advantaged, low-cost plan other than an individual retirement account.

Retirement Roundup: Two-thirds of Colorado voters anxious about retirement

A digest of timely information and insight about finance, investing, and retirement.



<a href="https://www.plansponsor.com/soa-finds-retirement-focus-greater-married-partnered-versus-singles/?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Newsdash">Retirement
focus greater for married versus singles</a> | <a href="https://www.plansponsor.com">PlanSponsor</a> 
Those married or partnered are more
likely to have a positive outlook on their finances, consider themselves
planners and savers and have a focus on saving for retirement, while those who
are single are prioritizing affording everyday bills and paying down student
debt, the <a href="https://www.soa.org/Member/">Society of
Actuaries</a> (SOA) has found. These differences are even
more dramatic for older generations, including their financial outlook and
planning horizons. There are wide gaps between married or partnered individuals
and those who are single in how they address their financial priorities and
their relationship with debt. These findings are potentially troublesome, given
that these older generations are generally approaching or in retirement, the
SOA says.



<a href="https://www.cnbc.com/2019/03/08/americans-are-more-prepared-for-retirement-than-we-thought.html">A
retirement crisis in the US? Maybe not.</a> | <a href="https://www.cnbc.com/">CNBC</a> 
Most stories about Americans and
retirement contain words like “<a href="https://www.forbes.com/sites/ebauer/2018/10/18/sec-commissioner-warns-a-retirement-crisis-tsunami-is-approaching/#609c7c271ac7">crisis</a>,”
“<a href="https://www.cnbc.com/2018/10/12/40percent-of-american-middle-class-face-poverty-in-retirement-study-says.html">poverty</a>,”
and “<a href="https://www.bankrate.com/financing/retirement/a-retirement-horror-story/">horror</a>.”
Not this one. While many people are still not saving enough for their golden
years, many of them are getting better at doing so — and hopeful signs abound.
Today, American households headed by individuals between the ages of 35 and 64
are running $3.83 trillion short of the amount they need to safely carry them
through their post-working life, according to new data by the <a href="https://www.ebri.org/content/retirement-savings-shortfalls-evidence-from-ebri-s-2019-retirement-security-projection-model">Employee Benefit Research Institute</a>. However, the last time EBRI ran the numbers, in 2014,
those families were $4.44 trillion behind. “That’s significantly lower than it
was,” said Jack VanDerhei, research director at the Institute.



<a href="https://www.cnn.com/2019/03/20/economy/lump-sum-pensions-retirement/index.html">It
just became easier for employers to dump retirees’ pensions</a> | <a href="https://www.cnn.com/">CNN</a> 
Traditional pensions are disappearing in America, and the federal
government just made it easier for employers to get rid of them. With no fanfare
in early March, the Treasury Department<a href="https://www.irs.gov/pub/irs-drop/n-19-18.pdf" target="_blank" rel="noreferrer noopener"> issued a notice</a> that allows employers to buy out current retirees from
their pensions with a one-time lump sum payment. The decision reverses<a href="https://www.irs.gov/pub/irs-drop/n-15-49.pdf" target="_blank" rel="noreferrer noopener">Obama-era guidance,</a> issued in
2015, that had effectively banned the practice after officials determined that
lump-sum payments often shortchanged seniors. Now, advocates for the elderly
worry that millions of people receiving monthly pension checks could be at
risk.



<a href="https://www.usatoday.com/story/money/personalfinance/retirement/2019/03/25/retirement-planning-top-financial-concern-seniors-healthcare/39177661/">The
top financial concern in retirement centers on health care</a> |
<a href="https://www.usatoday.com/">USA Today</a> 
Though retirement is an exciting milestone to look forward to, the idea
of it can be nerve-wracking. After all, there are a host of financial unknowns
associated with retirement, and living on a fixed income leaves many seniors struggling
to make ends meet. It’s therefore encouraging to learn that 84 percent of
seniors today think their retirement has been as good as expected, if not
better, <a href="https://content.copera.org/retirement-roundup-retirement-focus-greater-for-married-versus-singles/">according to T.Rowe Price</a>. But
retirees still harbor financial concerns. Many seniors have money-related
worries on the brain, but according to T. Rowe Price, they all center on one
key thing: <a href="https://www.fool.com/retirement/2018/02/12/heres-the-latest-on-what-healthcare-will-cost-in-r.aspx?utm_campaign=article&amp;utm_medium=feed&amp;referring_guid=42cab854-3a78-47e6-9d16-246a0ed8d378&amp;utm_source=usa-today" target="_blank" rel="noreferrer noopener">health care</a>.



<a href="https://content.copera.org/retirement-roundup-retirement-focus-greater-for-married-versus-singles/">Anactive, full retirement depends on proactive, long-term planning</a> |
<a href="https://www.kiplinger.com/">Kiplinger</a> 
People are living longer, but how many are
living well in retirement? When it comes to a retirement that’s both enjoyable
and financially secure, so much depends on how well people planned financially,
and whether their income strategy was designed for the long road and the bumps
that may occur as they travel along it. Too often, it’s not. That’s why, when
preparing for retirement, it’s important to be proactive and get as far ahead
of the curve as possible so variables like a fickle market and life events
don’t disrupt and undermine your financial security. Rather than wait for
something negative to happen and reacting to it, there are ways to build a plan
that can help weather storms and sustain you for a long and enjoyable
retirement.

Retirement Roundup: Retirement focus greater for married versus singles

A digest of timely information and insight about finance, investing, and retirement.



<a href="https://hbr.org/2018/03/americans-havent-saved-enough-for-retirement-what-are-we-going-to-do-about-it">Americans haven’t saved enough for retirement. What are we going to do about it?</a>&nbsp;|&nbsp;<a href="https://hbr.org">Harvard Business Review</a> Ultimately, the shift from defined benefit pension plans to employee-directed defined contribution 401(k)s <a href="http://crr.bc.edu/wp-content/uploads/2015/06/wp_2015-17.pdf">is the major driver of the impending retirement crisis</a>. Beginning in the 1980s, this move helped companies reduce their retirement liabilities and better meet their quarterly financial targets, but put an unmanageable burden on employees. For 401(k)s to be effective, for example, contributions must be made consistently throughout a worker’s career. In practice, people tend to make contributions sporadically. They also struggle in choosing contribution levels and investment options, and avoiding the temptation of using their savings for other needs.



<a href="https://content.copera.org/retirement-roundup-what-can-be-done-about-the-impending-retirement-crisis/">Ohio lawmakers kill bill to cut PERS benefits</a> |<a href="http://www.dispatch.com">The Columbus Dispatch </a>Republican House leaders shut down hearings on legislation to reduce benefits for Ohio’s largest public retirement system after running into fierce opposition from retirees. The measure would implement recommendations by the Ohio Public Employees Retirement System – or OPERS – aimed to shore up the $90 billion fund. After a handful of hearings, the bill did not have enough votes to pass. It was opposed by many Republican and Democratic lawmakers, and even the state representative sponsoring the bill was skeptical about the plan.



<a href="https://www.marketwatch.com/story/why-early-retirement-can-be-a-killer-2018-03-19">Why early retirement can be a killer</a> |<a href="https://www.marketwatch.com">MarketWatch</a>Think twice – nay, thrice – before claiming your Social Security benefits at age 62. Your life might depend on your decision. Literally. That’s because there’s a marked increase in mortality among men who retire at 62 and begin receiving Social Security, according to a fascinating new study that recently was distributed by the National Bureau of Economic Research. Its authors are two economics professors: Maria Fitzpatrick of Cornell University and Timothy Moore of the University of Melbourne in Australia. The increase in the death rate is quite large, furthermore, particularly among males who retire and claim Social Security at 62: By 20 percent, according to the study. Among females, in contrast, the data are inconclusive.



<a href="https://www.nytimes.com/2018/03/30/health/unretirement-work-seniors.html">Many Americans try retirement, then change their minds</a> |<a href="https://www.nytimes.com">The New York Times</a> Sue Ellen King had circled her retirement date on the calendar: March 8, 2015. She had worked as a critical care nurse and nursing educator at University of Florida Health (UF Health) in Jacksonville, Fla., for 38 years; co-workers joked that she was there when the hospital’s foundation was laid, which happened to be true. So the send-offs went on for days — parties in the units where she had worked, a dinner in her honor, gifts including a framed photo signed by colleagues. Ms. King felt ready. She’d turned 66, her full Social Security retirement age. She’d invested fully in the hospital’s 401(k) plan and consulted with a financial adviser. She and her husband, who had already retired, had paid off the mortgage on their three-bedroom ranch. They took a week’s trip to Hilton Head, S.C., to celebrate their impending freedom. But her retirement lasted just three months. “I’d done all the preparation, except to really think about what life was going to be like,” Ms. King said. Days spent organizing recipes and photos, and lunching with friends, proved less engaging than expected.



<a href="https://www.ai-cio.com/news/minnesota-senate-unanimously-approves-pension-bill/">Minnesota Senate unanimously approves pension bill</a> |<a href="https://www.ai-cio.com">Chief Investment Officer</a>The Minnesota State Senate has unanimously approved a pension overhaul bill that proposes mandatory contribution increases, reduced cost-of-living adjustments, and a lower investment rate of return for the state’s public retirement plans. Backers of the reform say the proposed bill would save Minnesota $6.1 billion over a 30-year period, $3.4 billion of which will be in immediate savings. They also say that if enacted, the state’s public pension plans’ funded status will be between 85 percent and 95 percent by 2048 from approximately 77.8 percent in 2017. “This is the largest pension reform bill in Minnesota’s history,” said the bill’s author, Sen. Julie Rosen (R), in a statement, adding that it “took years of work and negotiations.”



<a href="https://blogs.wsj.com/economics/2018/04/03/why-women-should-keep-working-after-their-husbands-retire/">Why women should keep working after their husbands retire</a> |<a href="https://blogs.wsj.com/">The Wall Street Journal</a>American women should keep working after their husbands retire if they want to catch up in terms of Social Security benefits, based on new research. Married couples often choose to stop working at the same time, taking advantage of the opportunity to travel or otherwise spend time together. But most married women are younger than their husbands, and some have delayed or interrupted careers due to child-rearing. Waiting longer to retire would bring them disproportionate gains under the formula for calculating Social Security retirement benefits, economist Nicole Maestas said in a recent paper. “If you have had a period out of the labor force, or a period of part-time work, or a period when you were earning much less than you’re earning now….you have an opportunity to replace those zeros with positive numbers that are high,” said Ms. Maestas, an associate professor of health care policy at Harvard Medical School. “I’m not sure people are fully aware of all of that.”

Retirement Roundup: What to do about the ‘impending retirement crisis’

A digest of timely information and insight about finance, investing, and retirement



<a href="https://www.wsj.com/articles/is-there-really-a-retirement-savings-crisis-1492999861">Is There Really a Retirement-Savings Crisis?</a>&nbsp; <a href="https://www.wsj.com/">Wall Street Journal</a>



Two experts look at the same data and come to different conclusions. What’s your take?



<a href="https://www.usatoday.com/story/money/personalfinance/retirement/2017/04/19/how-fix-americas-broken-retirement-system/100185208/">Analysis: How to fix America’s broken retirement system</a>&nbsp;|&nbsp;<a href="https://www.usatoday.com/">USAToday</a>



The 401(k) isn’t working. So what to do: Tweak, replace, or come up with something completely different? Read more about current thinking on how to fix America’s broken retirement system.



<a href="http://time.com/money/4741103/retirement-jobs-social-contact/">This Is the Biggest Reason to Work After You Retire (Besides Money)</a>&nbsp;|&nbsp;<a href="http://time.com/money/">Money</a>



Forty-five percent of middle-income baby boomers expect to work part-time in retirement, allowing retirees to socially reconnect while filling an empty schedule.



<a href="http://www.benefitspro.com/2017/04/24/10-misconceptions-about-saving-for-medical-care-in?page_all=1">10 misconceptions about saving for medical care in retirement</a>&nbsp;|&nbsp;<a href="http://www.benefitspro.com/">BenefitsPro</a>



Where Americans plan to get the money to pay for health care in retirement, and how far they think that money will stretch when it also has to pay for food, clothing, shelter and any activities or other necessities that come along with retirement.



<a href="http://time.com/money/4743298/retirement-plan-happiness/">4 Smart Tips for a Happy Retirement &#8211; From Someone Who’s Been There</a>&nbsp;|&nbsp;<a href="http://time.com/money/">Money</a>



Multiple transitions, grounding, type of retirement, and dreams – four key insights from someone who has been there.



<a href="http://www.marketwatch.com/story/how-to-deal-with-the-haters-who-dont-support-your-early-retirement-dreams-2017-04-26">How to deal with the haters who don’t support your early-retirement dreams </a>|&nbsp;<a href="http://www.marketwatch.com/">MarketWatch</a>



Many see public employees as those who are lucky enough to retire “early.” Read more about strategies to deal with unsolicited input on your retirement decision.



<a href="https://www.brookings.edu/blog/up-front/2017/04/26/the-hutchins-center-explains-prescription-drug-spending/">The Hutchins Center Explains: Prescription drug spending</a>&nbsp;|&nbsp;<a href="https://www.brookings.edu/">Brookings</a>



How much do Americans spend on prescription drugs, the trend, and comparisons to other countries are included in this Brookings “explainer.”

Retirement Roundup: Is There Really a Retirement-Savings Crisis?

Retirement Roundup:&nbsp;A digest of timely information and insight about finance, investing, and retirement.



<a href="http://www.plansponsor.com/Americans-Cite-Several-Reasons-for-Not-Saving-More-for-Retirement/">Americans Cite Several Reasons for Not Saving More for Retirement</a>&nbsp;|&nbsp;<a href="http://www.plansponsor.com/">PlanSponsor</a>



First the good news: For the first time in more than six years of polling, Americans say they feel more comfortable with the savings they have now compared to the year before, according to a <a href="http://www.bankrate.com/">Bankrate.com</a> report. The bad news: A Bankrate survey finds they&#8217;re not doing a better job at saving. <a href="http://www.plansponsor.com/Americans-Cite-Several-Reasons-for-Not-Saving-More-for-Retirement/">Read more</a> about the top reasons why Americans aren&#8217;t saving more money.



<a href="https://www.copera.org/americans-cite-several-reasons-not-saving-retirement" class="broken_link">Medical Expenses and Debt Among Retirement Concerns</a>&nbsp;|&nbsp;<a href="https://www.ebri.org/">EBRI</a>



The most recent <a href="https://content.copera.org/americans-cite-several-reasons-not-saving-retirement/">Retirement Confidence Survey (RCS)</a>, the longest-running survey of its kind in the nation, finds that the share of American workers who are very confident in their ability to afford a comfortable retirement remains low, and some workers report that preparing for retirement is emotionally or mentally stressful. However, among retirees, confidence in their ability to afford a comfortable retirement continues to be comparably high.



<a href="https://www.copera.org/americans-cite-several-reasons-not-saving-retirement" class="broken_link">Building a Retirement Budget</a>&nbsp;|&nbsp;<a href="https://content.copera.org/retirement-roundup-investors-see-worst-performance-since-great-recession/">U.S. News and World Report</a>



They say every day in retirement is a Saturday. But will your expenses increase or decrease in retirement? Why conventional wisdom about spending in retirement may not be accurate and what to anticipate or perhaps eliminate when creating your retirement budget.



<a href="https://www.fool.com/retirement/2017/03/28/10-retirement-stats-every-baby-boomer-should-know.aspx">10 Retirement Statistics Every Baby Boomer Should Know</a>&nbsp;|&nbsp;<a href="https://www.fool.com/">The Motley Fool</a>



Did you know nine out of 10 retirees say they are happy? Find out the other important stats you should know about retirement.



<a href="https://www.wsj.com/articles/the-rising-retirement-perils-of-401-k-leakage-1491171015">The Rising Retirement Perils of 401(k) ‘Leakage’</a>&nbsp;|&nbsp;<a href="https://www.wsj.com">Wall Street Journal</a>



When employees change jobs, they often refund their 401(k) retirement savings instead of rolling them over to their new employer’s plan. Employers are working to discourage employees from using their 401(k) retirement savings for purposes other than retirement.



<a href="http://www.plansponsor.com/Boomers-Running-Out-of-Time-to-Save-for-Retirement/?fullstory=true">Nearly Half of Baby Boomers Say They Have No Retirement Savings</a>&nbsp;|&nbsp;<a href="http://www.plansponsor.com/">PlanSponsor</a>



A survey of 2,500 pre-retirees finds that 46 percent of Baby Boomers say they have no retirement savings—the highest percentage recorded in seven years. Working with a financial planner increases savings and retirement confidence according to the study conducted by the <a href="http://www.irionline.org/">Insured Retirement Institute</a>.

Americans Cite Several Reasons for Not Saving More for Retirement

When it comes to saving for retirement, Coloradans are anxious, and so are most Americans. The <a href="http://www.nirsonline.org/">National Institute on Retirement Security</a> recently released results from a <a href="https://content.copera.org/surveys-find-coloradans-americans-worried-economic-security-retirement/">study</a> of 400 Colorado adults age 25 or older to better understand their attitudes and opinions about retirement savings.



Along with a <a href="http://www.nirsonline.org/index.php?option=com_content&amp;task=view&amp;id=956&amp;Itemid=48">similar survey</a> of adults across the country, the studies show that saving for retirement continues to be a daunting challenge for workers and that they would support policies to strengthen savings in retirement plans.



Retirement in crisis



Most Coloradans (82 percent) believe that the nation faces a retirement crisis, with both older (age 55 and over) and younger (ages 25-54) residents expressing similar levels of concern.



Younger Coloradans are more anxious about retirement than older residents of the state, and they are more willing to increase their savings as a way to ensure greater retirement security. When asked about their own retirement, 31 percent of older Coloradans and a near majority – 44 percent – of younger Coloradans reported feeling unprepared, unsettled, frightened or concerned about being prepared.



[Read more from <a href="https://content.copera.org/surveys-find-coloradans-americans-worried-economic-security-retirement/">The Dime</a> about how younger and older Coloradans’ views about retirement security differ, and where they are similar.]



Working to save…



Coloradans are working hard to prepare for retirement, with 80 percent planning to stay in their current job as long as possible before retiring. Seven of 10 plan to or are already cutting spending in retirement, and almost as many – 58 percent – say they plan to increase their savings a little in order to ensure a financially secure future.



&#8230;but falling behind



But at the same time, today’s economic conditions are concerning, say 72 percent of Coloradans. And 78 percent believe that it will get harder in the future for Americans to save for retirement.



Increasing costs along with debt and slow salary growth are particularly worrisome. The rising cost of long term care was the most troubling challenge, with 80 percent of Coloradans calling it a major factor in making retirement difficult, along with 79 percent who said salaries not keeping up and increasing debt are major factors as well.



Coloradans place a high value on retirement benefits, with nearly seven in 10 (69 percent) regarding retirement benefits as an extremely or very important job feature, and nearly two-thirds (65 percent) saying they’d be willing to sacrifice pay for guaranteed retirement income.



More than three-fourths (76 percent) believe that the average worker cannot save enough on their own to guarantee a secure retirement, and two-thirds (66 percent) say employers do not contribute enough money for a secure retirement for their workers. Even more respondents (82 percent) agree that the average retiree does not know enough about managing investments to ensure their savings will last.



Searching for solutions



When it comes to leadership from Washington, most Coloradans (84 percent) agree that leaders do not understand how hard it is to prepare for retirement. And almost as many (82 percent) agree that ensuring more Americans can have a secure retirement should be a higher priority.



With nearly nine out of 10 Coloradans (87 percent) holding favorable views of traditional pension plans, pension-style savings plans may be a part of the solution to the retirement security problem. In fact, large majorities see pensions bringing security, with 83 percent agreeing that government should make it easier for employers to offer traditional pension plans, and 79 percent saying that pension disappearance is harming their ability to achieve the American Dream.



Pension benefits should be available to all workers, according to more than three quarters (78 percent) of Coloradans. But for workers who do not have access to a retirement plan through their employer, 69 percent agree that a new retirement plan facilitated by the state is a good idea.



Good for Colorado, good for the country



<a href="http://www.nirsonline.org/index.php?option=com_content&amp;task=view&amp;id=956&amp;Itemid=48">Similar research</a> of Americans across the country also conducted by NIRS <a href="http://www.denverpost.com/2017/02/28/retirement-anxiety-america/">found that</a> almost 76 percent of those polled worry that economic conditions might hurt their chances for a secure retirement.



Nationally, 55 percent of those surveyed “strongly agreed” that the country faces a retirement crisis and 80 percent said the average worker “cannot save enough on their own to guarantee a secure retirement.” That’s up from 73 percent in 2015.



Pensions beat 401(k)s for living comfortably, <a href="http://www.plansponsor.com/No-Political-Divide-on-Retirement-Security/">according to 71 percent</a> of Americans.



<a href="https://www.copera.org/surveys-find-coloradans-americans-worried-economic-security-retirement" class="broken_link">Preparing for Retirement in Colorado&nbsp;Infographic</a>

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