Part of Invesco’s Saving for Life series
Although generational differences run the gamut from music preferences to the digital divide, baby boomers, Generation X and millennials have this in common: concern about retirement security. According to a recent survey1:
- 45% of boomers (born between 1946 and 1964) anticipate a lower standard of living in retirement.
- 83% of Gen Xers (born between 1965 and 1979) feel that achieving financial security will be more difficult for them than it was for their parents.
- Only 18% of millennials (born between 1980 and 1995) feel very confident about retirement.
- 77% of all workers surveyed are concerned about the potential for diminishing Social Security benefits.
In addition, because only about half of workers in these three generations believe they’re saving enough for retirement, they anticipate working at least part time in retirement. More telling, 15% expect this will be their primary source of retirement income.
Let’s take a closer look at the overall retirement picture for each generational cohort.Continue
Analyzing the successes and challenges of ‘DC schemes’
This year, the US Defined Contribution (DC) system is celebrating the 10-year anniversary of the Pension Protection Act of 2006 (PPA). Since its passage, significant progress has been made in areas like default funds and automatic features — and there is cause for commendation. However, most in the industry acknowledge there is much work to be done in order for DC plans to provide the level of retirement income participants need. To answer the question of where we go from here, it makes sense to study the most established and mature DC system on the planet — the Australian pension system.
Just as we examined the key attributes of the UK DC system, let us explore some of the aspects of the Australian system that we could potentially employ here in the US.Continue
Part of The Business of Retirement series
On July 21, 2016, the Department of Labor (DOL) issued proposed amendments to the 5500 series forms in a “Notice of Proposed Forms Revisions,” prepared jointly by three agencies: the DOL, the Internal Revenue Service and the Pension Benefit Guaranty Corporation, collectively referred to as “the agencies.”
Form 5500 has historically served as the primary source of information about the operations, funding and investments of private-sector, employment-based pension and welfare benefit plans in the US. However, existing forms have not kept pace with industry changes, making it difficult for the agencies to capture the information they need to protect employee retirement and health benefits.
The proposed revisions would add a number of new reporting requirements designed to aid the agencies in assessing whether a retirement plan is being operated and maintained in compliance with the Internal Revenue Code and the Employment Retirement Income Security Act of 1974 (ERISA). The changes would affect several existing reporting obligations for retirement plans, including:Continue
Part of Invesco’s Legislative Insights series
The retirement world is watching to see what changes may be in store for the industry under President-elect Donald Trump and the Republican Congress. It is unclear whether retirement policy will be a priority for President-elect Trump, but this blog highlights areas that could possibly be targets for change.
According to the House task force report on tax, released by House Republicans earlier this year, “The Committee on Ways and Means will examine existing tax incentives for employer-based retirement and pension plans in developing options for an effective and efficient overall approach to retirement savings.” However, President-elect Trump has not said if he would support or oppose limiting the tax exclusion for retirement plan contributions.Continue
Part of Invesco’s Legislative Insights series
With the presidential election victory of Donald Trump and the success of Republicans in holding majorities in both the House of Representatives and the Senate, questions have arisen about the immediate future of the fiduciary rule finalized by the Department of Labor (DOL) in April 2016. In this article, we explore whether changes may be in store for the controversial rule.
What are Trump’s options for changing the rule?Continue
A 529 college savings plan can bring a smile to your grandchild’s face for years to come
The holidays are upon us again, and many grandparents are looking forward to one of their favorite moments of the season – the delighted smiles of grandkids opening a present they’ve been dreaming of all year. Give it a few weeks, though, and last year’s trendiest toy often becomes this year’s latest giveaway.
This season, consider a gift your grandkids won’t break, wear out or outgrow – the enduring gift of a college education.Continue