There are some key benefits to using a retirement planning tool. They can offer direction on savings goals. Some can provide a gauge of your retirement readiness compared to peers’ readiness. Many can calculate a probability of success to measure your ability to cover retirement expenses or how much your income and portfolio withdrawals are expected to be.
There are factors, though, that are not in your control. Some of these include retirement plan changes, developments in the real estate market, interest rates, unplanned early retirement, inflation, longevity, debt, and retirement behavior.
In this article, Milliman’s Una Bearden and Alicia Favila discuss in more detail some considerations, benefits, and possible pitfalls of online retirement planning tools.
Millennials became the largest represented generation in the
U.S. labor force in 2016 and now stand at about 35% of the workforce. Yet due
to issues like unstable work, debt, and coming of age during the global
financial crisis of 2007-2010, concern about the retirement savings of
Many statistics show that this generation’s retirement risks
may not be so different from older generations. In fact, many complexities
surround the financial wants and needs of Millennials. Employers may benefit
from learning more about this generation’s changing relationship with
In light of the Congressional work around this subject, Milliman has put together an infographic that visually explains some of the complexities underlying the multiemployer pension funding problems. The data is taken from Milliman’s Spring 2018 Multiemployer Pension Funding Study, which reports on the estimated funding status of all U.S. multiemployer plans.
Superannuation is one of the most valuable products working Australians own. Yet it’s one of the products they care least about.
Forcing people to buy a product when the value can’t be unlocked for many years is not a good starting point for engagement. Attempting to persuade members to save more super by using broad-based one-size-fits-all targets has failed.
But research suggests that when members are able to see their future selves in vivid and realistic detail, they are more willing to make choices today that may benefit them in the future. Super funds can play a role in connecting the two.
In this article, Milliman’s Jeff Gebler says that the super industry’s dominant comfortable retirement savings target is not indicative of who its members are or who they will become. He says that funds can help members see themselves in meaningful, positive terms, thus sparking genuine engagement and better long-term decisions.
President Trump recently signed into law (P.L.115-35) a bill “disapproving” a U.S. Department of Labor (DoL) final rule that permitted states to create retirement savings programs for nongovernmental workers whose employers do not sponsor a retirement plan. The August 30, 2016, final rule specified the conditions to qualify for a “safe harbor” that would exempt certain state-run individual retirement arrangements from ERISA, the federal law that governs retirement plans sponsored by employers in the private sector.
Despite the disapproval, several states (and municipalities) remain committed to creating or studying retirement savings vehicles for workers whose employers do not offer a plan. Oregon became the first to launch such a program, called OregonSaves™. This Client Action Bulletin provides some perspective.
Twelve employers based in the Pacific Northwest were recognized with the Save 10 award during the 45th annual Milliman Employee Benefits Conference held in Seattle on April 6. The Save 10 award honors their work helping their employees save for retirement.
The Save 10 initiative is a movement to reinforce a “Save 10” rule of thumb, recognizing employers who help their employees to save at least 10% of their income toward retirement. Why Save 10? According to Francis Creighton, Executive Vice President of Government Affairs of Financial Services Roundtable, which sponsors the initiative, 10% is easy to remember and reflects the old adage of saving at least 10% of your income for retirement. While this may not be the ideal contribution rate for everyone, getting employees to save for retirement, and providing employers the tools to allow their employees to do so, remains fundamental.
The Save 10 initiative emphasizes the effectiveness of auto features in retirement plans, such as auto enrollment and auto escalation. Research shows that auto features encourage employees to save, even though they may not remember to sign up and start saving from their hire date. The rate of success in saving increases even more for employees with auto escalation of contribution rates.
Milliman is proud to work with companies that want to provide the best benefits for their employees. Milliman works closely with employers to help provide best-in-class retirement plans for their employees that reflect the philosophy and unique identity of each organization.
Employers honored at the April 6 event were: Expeditors International of Washington, Inc., ICOM America, Inc., McKinstry Co., M Financial Group, Nelson Irrigation Corporation, Olympia Federal Savings, PACCAR Inc., Swanson Group, Inc., Usibelli Coal Mine, Inc., Valley Medical Center, Washington Permanente Medical Group, and Zimmer Gunsul Frasca Architects, LLP.
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