Is a retirement savings crisis on the horizon?

The most recent House Ways and Means Committee hearing focused on retirement savings challenges — and potential opportunities

Jon VoglerTime to read: 3 min

At the House Ways and Means Committee hearing on Feb. 6, 2019, witnesses promoted various solutions to address the projected retirement savings shortfall of American workers.

Committee Chairman Richard Neal, D-MA, opened the hearing by highlighting current trends that he said are indicative of a retirement income crisis in America (e.g., overly modest Social Security benefits, disappearing traditional pension plans and workers’ struggles to save for retirement). He noted that employer-sponsored retirement plans are the key to preparing for retirement, despite significant gaps in coverage for millions of workers, especially for employees of small businesses. To bolster his argument, he cited statistics showing that for workers earning between $30,000 and $50,000 per year, more than 70% would participate if offered a retirement plan at work, but only 5% would save on their own through an individual retirement account (IRA).

Neal also pointed to the open multiple employer plan (MEP) provisions of the Retirement Enhancement and Savings Act (RESA), reintroduced in Congress on Feb. 6, as a good starting point for bipartisan discussion, as well as his Automatic Retirement Plan Act, which would require all but the smallest employers to maintain a 401(k) plan for their employees.

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Employer 401(k) contributions hit a six-decade record

A recent study also shows that auto enrollment reached a new high

Jon VoglerTime to read: 2 min

Employer contributions to 401(k) plans have hit a new record, according to a recently released survey from the Plan Sponsor Council of America (PSCA). The survey, which collected data from 2017, found that employers were contributing an average of 5.1% of pay to their employees’ 401(k) accounts, the highest percentage ever recorded in the 61-year history of the PSCA survey. Employees chipped in an average of 7.1% of their pay, according to the survey.

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A 529 plan can help you keep your college savings resolution

Turn your savings resolution into an achievable goal with a 529 college savings plan

Time to read: 2 min

According to US News & World Report, 80% of New Year’s resolutions fail by February.1 The problem? Many people set overly ambitious resolutions with no tangible action plan to reach their desired goals — and as the old saying goes, “A goal without a plan is just a wish.”

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This season’s perfect gift idea? A 529 plan contribution.

This holiday season, give the lifelong gift of education

Time to read: 2 minutes

My wife and I have always given holiday gifts to our nieces and nephews. As each child grew older, we did our best to tailor the presents to their individual personalities; we’d choose books and CDs for one child, and jewelry and gift cards for another. But keeping up with the trends wasn’t easy, and finding the perfect present for each child soon turned into a shopping nightmare each December — until we realized the perfect gift idea was right under our noses.

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When it comes to retirement bills, we’re bullish on bipartisanship

The midterms seemed like a recipe for gridlock, but Congress has a way of cooperating on under-the-radar legislation.

  Time to read: 3 min

As expected, the US midterm elections resulted in a split Congress between a newly Democratic House and an increasingly Republican Senate. For many issues, this looks like a recipe for gridlock. But when it comes to retirement legislation, we believe there tends to be more bipartisanship. As part of Invesco’s Government Affairs team, we are closely monitoring the legislative landscape as it relates to retirement policy. This is what we’re hearing.

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Give thanks for college savings

There are many things to be thankful for this time of year, including the gift of college savings

Time to read: 2 minutes

As the father of three college graduates, I know firsthand how exciting it is when students return home from school for Thanksgiving break — and not just for the parents. For many students, Thanksgiving break is their first trip back home since the school year started, making that long-awaited family reunion especially sweet.

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