Products August 20, 2020

Security Benefit Launches Retirement Plan Mobile App

The company is also offering a new platform that combines health and financial wellness.

Reported by

Security Benefit has launched its first mobile app for retirement plan participants, called My Security Benefit. It covers 401(k)s, 493(b)s and other types of defined contribution (DC) plans, as well as individual retirement accounts (IRA)s.

Greg Kratz, head of mutual fund platforms, tells PLANADVISER that the application is intuitive and multi-functional. “You can get your account balance, review contributions and track investment performance,” Kratz says. “One of the things we are excited about is the retirement calculator. It allows users anywhere, or with the help of their adviser, to rightsize their contributions based on their personal goals, to enhance their retirement readiness. It walks participants through five questions, including their salary, deferral rate, outside assets or savings and what percentage of their salary they would like to live on in retirement. If they don’t know the answer to a question, to make it easy to use, the calculator tells the participant what the typical answer is.”

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The calculator then can tell the participant if they are on track for a successful retirement or if they need to make adjustments, Kratz says. The score is based on a value of zero to 100.

Participants can change their allocations through the mobile app, Kratz says, but to increase their deferral rate, they need to work with their employer.

Doug Wolff, senior vice president of Security Benefit, adds: “What we are really trying to do is bring the services and technological conveniences you typically find in a large 401(k) plan to the smaller 401(k) and 403(b) market and the advisers that serve these plans.”

In conjunction with the new application, Security Benefit is also rolling out a new platform that combines health care and wealth management. The platform includes educational articles on a range of topics. When participants take classes, they receive points that they can redeem at large retailers, Kratz says. “You can even sync your fitness tracker to the platform and build points when you take steps. Enrollment is paperless, which is another feature we think clients will like.”

On the investment side, the platform offers SmartChoice, an open architecture investment platform that offers fiduciary services to advisers, he says. “But if a sponsor or adviser wants to use their own fiduciary services, we can unbundle this,” Kratz says.

Wolff adds: “While this has been a time when many companies have taken a step back or paused in the retirement space, we have been moving forward and upgrading our service capabilities to improve the experience and ease of use for retirement plan participants.” Wolff adds that the interactive nature of the app gives financial professionals the opportunity for more contact with participants, on a more consistent basis, which advisers should find particularly useful at this time of COVID-19 lockdowns preventing many advisers from having group or one-on-one meetings with participants.

Data & Research August 20, 2020

GAO Finds Women Anxious About Retirement Security

It reports one of the big issues is that women are overrepresented in low wage professions.

Reported by

In a report to the U.S. Senate’s Special Committee on Aging, “Older Women Report Facing a Financially Uncertain Future,” the Government Accountability Office (GAO) outlined numerous obstacles women face when trying to save for retirement.

GAO based its findings on 14 focus groups it held in rural and urban areas, primarily among women age 70 and older, as well as the 2019 Current Population Survey; the Health and Retirement Study, which is based on data from 2002 to 2014; and the 2016 Survey of Consumer Finances. The report was requested by Sen. Susan Collins, R-Maine, chairman of the Senate Special Committee on Aging, and Sen. Bob Casey, D-Pennsylvania, a ranking member of the committee. The two senators note that in 2018, the national poverty rate for women ages 65 and older was 11.1%, compared with 8.1% for men in the same age group.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Many of the women in the focus groups expressed concerns about the future of Social Security and Medicare, and the cost of health care and housing in retirement. They also cited divorce, being forced to leave the workforce earlier than planned and a lack of financial education as obstacles to their retirement. GAO also noted that women are paid less than men, live longer, are more likely to work in low wage professions and often leave the workforce to raise children or to serve as the caregiver to older family members.

GAO earlier reported that women 65 and older have less retirement income than men and are nearly twice as likely as men to be living in poverty. GAO said unmarried women are at a greater risk of poverty in old age. Women who never married cannot take advantage of some federal benefits conferred through marriage, such as Social Security spousal and survivor benefits.

When asked to define what being independent in retirement meant to them, the women in the focus groups said being able to meet essential expenses and not having to scrutinize every purchase. They also said it is the ability to be able to afford other things, beyond the essentials. Some of the women said it is not having to worry about the future or rely on others to support them financially.

Women in eight of the focus groups shared their fears about potentially needing to cover the cost of long-term care, with the majority not having insurance to cover such a cost.

Women in most of the focus groups said they wished personal finance education was taught in schools, starting in kindergarten and continuing through college. They also said they thought employers should provide financial planning sessions for their employees. Many of the women also said they do not understand Social Security and Medicare.

Women who sought professional advice in making financial decisions said that the results of the advice they received were mixed. Those dissatisfied with the advice said it was faulty, came at a high cost or subjected them to financial fraud.

 A study from Merrill Lynch, in partnership with Age Wave, suggests that the financial industry, employers and policymakers, among others, can make an impact when it comes to giving financial advice by respecting women’s different life journeys and longer life spans, acknowledging they are not all the same, encouraging financial discussions, facilitating financial education and confidence, and demanding equality in pay and promotions. And Lincoln Financial says being educated and working with a professional adviser is the best route for many Americans, including women, in order to receive the support and advice they need to maintain their lifestyle in retirement.

Women who filled out a written questionnaire for the GAO study were asked what advice they would give younger women with respect to preparing for retirement. The most commonly mentioned actions, in order of times cited, were: save, invest, seek financial advice and/or education and be frugal to keep debt low.

In more than half of the focus groups, the women said they experienced pay inequality during their careers.

GAO found that nearly 40% of households with older women had less than $5,000 in checking and savings accounts in 2016, and 20% had less than $1,000. “Most women have less income to maintain their living standards in retirement than they did when they were working, and, on average, they increasingly rely on Social Security as their main source of income,” GAO says.

Collins said, “As the chairman of the Senate Aging Committee, ensuring that more people are better prepared for retirement is one of my top priorities. Improving women’s retirement security is a significant public policy challenge that requires us to work together to find common ground. After spending years in the workforce and caring for loved ones, women should be able to enter retirement with the confidence that they will be able to live comfortably and maintain their independence as they age.”

Earlier, Collins and Casey authored the Older Americans Act, which includes a provision requiring the continued operations of the National Resource Center for Women and Retirement, which provides retirement planning and other educational tools.

Women are less financially prepared than men, according to the fifth annual Advisor Authority study commissioned by Nationwide Advisory Solutions and conducted online by The Harris Poll. And, while women more commonly had an optimistic financial outlook last year (56% versus 53%), they were less likely to be optimistic than men about the U.S. stock market (36% versus 50%) and the U.S. economy (35% versus 48%).

«