Data & Research July 10, 2012

Analysis Indicates Recession Stalled Retirement Savings

Data from the 2010 Survey of Consumer Finances (SCF) suggests retirement savings progress has slowed and even reversed in the wake of the financial crisis.
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Despite the increase in automatic enrollment due to the Pension Protection Act of 2006, the percent of eligible employees not participating in their plans ticked up by 2010, according to an analysis of SCF data by the Center for Retirement Research at Boston College (CRR). At the same time, contributions slipped and leakages through cash outs and hardship withdrawals increased.     

These trends, combined with financial turmoil and a weak economy, led to median 401(k)/IRA balances that changed little from 2007 to 2010.   

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The typical household approaching retirement (age 55 to 64) had only $120,000 in 401(k)/IRA balances in 2010, virtually unchanged from $118,000 in 2007, the SCF data showed. Those age 45 to 54 had lower balances in 2010 than in 2007 ( $70,000 vs. $75,000), and younger households held only $35,000 in 2010 compared with $44,000 in 2007.    

A report of the CRR’s analysis can be downloaded here.

 

Products July 10, 2012

Education Tool Reinforces Importance of Saving, Planning

 

Pentegra Retirement Services introduced an online education tool for plan sponsors and participants.

 

 

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“The Building Blocks for Retirement” is a library of information at Pentegra.com offering retirement planning vehicles and informative content to remind participants of the importance of saving and investing for retirement. Asset allocation, diversification, retirement planning essentials, investment strategy, risk tolerance, revisiting your portfolio and distribution planning are among the topics covered. 

The tool will also include e-newsletters that will directly correlate with key calendar dates in the industry and make it easier for plan sponsors to communicate with participants.

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“We believe that it is essential to communicate with our participants and reinforce the importance of saving for retirement,” said Rich Rausser, Pentegra’s senior vice president of client services. “We created this tool to promote retirement savings education and provide as much support, and as many tools as possible for our team.”

Click here for the website.

 

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