Retirement Quick Facts & Fiduciary Training for Plan Sponsors

Here were a few retirement insights and facts that crossed our desk recently and wanted to pass along to you. Don't forget to save the date for our upcoming Fiduciary Training mentioned at the close of the article.

1. LIVING LONGER. While the average American retires in their early sixties, some workers will need to plan for a much longer retirement. From 1990 to 2024, the number of centenarians in the US nearly tripled from 37K to 100.5K. Over the next thirty years, the number Americans living to 100 is expected to triple again rising form 101.5K to 421.7K. (Source: Pew Research)
2. PEOPLE OVER PROMPTS. Charles Schwab found that just under half (49%) of 401(k) participants would be comfortable asking AI tools for help with financial planning, but overall, they prefer a personal touch. 95% of respondents said they would be likely to follow financial reccomendations from a human. (Source: Charles Schwab)
3. "I'LL BE FINE. NOT SURE ABOUT YOU." Two-thirds of the US population are either "somewhat" (45%) or "very" (21%) confident that they will be able to have a comfortable retirement. However, 42% of those surveyed think that future generations will be worse off in retirement compared to current retirees, versus just 15% who expect future retirees to be better off. (Source: TransAmerica Center)
4. AN EXTRA 20 YEARS. In response to the reintroduction of the 'You Earned It, You Keep It Act" which would eliminate the taxation of Social Security benefits at the Federal level and raise the cap on income subject to FICA taxes from $168.8K to $250K, the chief actuary of the Social Security Administration noted that the measure would extend the ability to full pay scheduled benefits for an additional 20 years. (Source: Investment News)
5. SHOW DON'T TELL. Researchers found that federal retirement plan participants who chose to use an interactive retirement saving tool that displayed the gap between projected goal and actual retirement income and allowed users to interactively see how contribution choices would affect the gap results in a 2.3% average annual increase in retirement contributions. (Source: Journal of Economic Behavior & Organization)
6. RECRUITING TOOLS. A study on how workers value workplace retirement plans found that workers are willing to give up 3.4% of wages to get a job with a 401(k) and 1.6% of wages for each percentage increase in the employer match. (Source: National Bureau of Economics Research)
7. RETIREES ON THE MOVE. The number of Americans who moved for retirement purposes in 2023 increased 44% versus 2022 to 338K, which was the fourth highest amount on record. Of those retirees who moved across state lines, Florida and South Carolina saw the largest percentage of inflows at over 10% each, while California (18.3%) and New York (11.4%) saw the largest outflows of retirees. (Source: HireA Helper, US Census)
8. WHO'S WATCHING THE KIDS? Sixty-seven percent (67%) of parents surveyed spend 20% or more of their income on childcare, and 89% spend 10% or more. The average cost of daycare for two children increased from $291 per week in 2013 to $510 per week in 2022. (Source: Care.com)
9. THE STUDENT STRUGGLE. In a 2023 survey, 93% of respondents said they're saving for their children's college education, 66% of Baby Boomer respondents (age 58 to 76) said they're saving for their grandchildren. Of those saving for both retirement and education, 41% have used retirement funds to pay for the college education of a relative, with the risk of a tax penalty for early withdrawals. (Source: Society of Actuaries)
10. FIDUCIARY TIPS & TRAINING. Mark your calendar for a Fiduciary Training session scheduled for Tuesday, April 23rd from 10-11 MST. This Allied-hosted session is designed for business owners, Plan Sponsors, and Investment Committee members looking to learn fiduciary best practices, responsibilities and ways to reduce fiduciary liability. A more detailed invitation will be coming soon.