/ Retirement Planning
403(b) & 457 Plans

Retirement Crisis

Recent studies have shown that few Americans are saving enough for retirement. It is important to know that Social Security cannot fully replace income during retirement. If a worker fails to adequately save and is relying on Social Security to make ends meet during retirement, he or she will be forced to accept a lower standard of living.

Does Your Employer Offer Retirement?

Retirement savings are needed to ensure you can live at your desired level once you retire. This type of savings usually comes in the form of funds that are accumulated over time in a retirement plan. However, a study by the Schwartz Center for Economic Policy Analysis reveals that almost half of working Americans were not even offered a retirement account by employers. This number, coupled with workers who are voluntarily not participating in a plan, equates to roughly 68 percent of working aged people.

Federal Reserve Findings

Another recently released survey, conducted by the Board of Governors of the Federal Reserve System, found that in 2013, approximately 31 percent of Americans reported having no retirement savings. This means that nearly one-third of workers in the United States currently have no money put away in any type of retirement account that can be used to supplement their Social Security benefits when they retire. Surprisingly, 19 percent of respondents ages 55 to 64, or those who are nearest to retirement and who should have already built up significant savings, have no savings or pension.

Consequences of Retirement Shortfalls

The consequences of retirement savings shortfalls could mean severe consequences for families as well as the national economy. Many workers could be forced to continue working well past retirement age, or households could be forced to significantly reduce their standard of living in retirement and rely heavily on family, charities and/or the government to make ends meet. As America’s population ages, the financial well-being of retirees and their families is growing increasingly important to the overall financial health of the national economy.

What Can I Do?

However, it is not too late to get started saving for retirement. If you currently have a 401k, 403b or similar plan you may be able to supplment your pension benefits.  The team at Ed4Ed offers a number of online guides to help you get the most from your retirement savings so you can maintain the standard of living you are accustomed to once you retire.  If you need additional support please use our contact form to ask for advise. 

Along with your pension plan, you will want to consider at least one supplemental retirement savings account. A large number of public pension accounts are extremely underfunded. For example, CalSTRS is an estimated $73 million underfunded. This could potentially further reduce the amount you would receive in pension payments post-retirement. Along with this, you should not expect your pension to fully replace your pre-retirement income.

Before you make a decision consider the following.

It is estimated that your pension will likely only replace 60 to 70 percent of your pre-retirement income. Because of these factors, it is crucial that you save as much as possible, with the help of supplemental retirement savings plans, to ensure you are financially secure during retirement.

Below are several pages which can help you determine what you should be doing now, depending on your age: