Five things to know about the 529 Ten Dollar Challenge

Small contributions to education savings accounts can add up over time

Several years ago, I read an article1 that detailed what you can do with $10 around the world. The author challenged her fellow reporters across the globe to see how far $10 could take them. From two sub sandwiches in Connecticut to two days of groceries in the Philippines, the answers varied widely depending on each reporter’s location.

That interesting perspective stuck with me over the years, so when I caught wind of another $10 challenge, I was all ears. Aptly named the 529 Ten Dollar Challenge, this initiative was created to raise awareness of one of my favorite topics — 529 plans — by showing that even small contributions to education savings accounts can add up over time. Education savers are currently participating by posting photos of themselves with $10 bills to social media and using the #529TenDollarChallenge hashtag.

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Fewer households could face retirement savings shortfall

A new study shows that the projected retirement deficit for US households has somewhat improved

Jon VoglerThe projected retirement deficit for US households has improved somewhat, though some remain at greater risk than others, according to new data from the Employee Benefit Research Institute (EBRI).

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Study highlights late-life financial risks for retirees

Reliance on 401(k) accounts may be tested by out-of-pocket costs and increased longevity

Jon VoglerTime to read: 2 min

As life expectancy rises, more people will face late-life financial risks for which they may be unprepared, according to a new report. The study for the Center for Retirement Research (CRR) at Boston College highlights risks faced by Americans aged 75 and older, a population that is projected to more than double by 2040. These risks include high our-of-pocket medical expenses, an increased possibility of financial mistakes due to declining cognitive abilities and the prospect of widowhood.

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Should you save or spend your tax refund?

This tax season, consider putting your refund toward a 529 plan

Time to read: 2 min

Tax season is upon us, and if there’s one upside to all that paperwork, it’s the prospect of receiving a tax refund.

According to the IRS, the average tax refund in 2018 was $2,899.1 Many consumers view this “extra” money as a kind of windfall, or unexpected gift. However, a tax refund is called that for a reason; after all, it represents money that was overpaid to the government. In reality, it’s simply a return of the interest-free loan you effectively granted the government the previous year.

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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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