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Saturday, February 23, 2013

Starting Saving – With a Purpose

Do you know only slightly more than half of all non-retired Americans (52%) think they are saving enough for "a retirement in which [they] will have a desirable standard of living?" Even fewer Americans say they have a goal in mind when it comes to saving (Consumer Federation of America (CFA), American Savings Education Council (ASEC), Employee Benefit Research Institute (EBRI)) 2012 survey).

So what can we do to improve those statistics? February 25 through March 2 has been designated as "America Saves Week." It’s an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status as well as an excellent excuse for business owners to promote good savings behavior among employees.

Consider this: Finances are employees' #1 cause of stress, which leads to higher health care costs for your company and negatively impacts employee productivity and morale (http://ezinearticles.com/?id=473303).  Employees who learn how to effectively manage their benefits are more empowered, more engaged, and more satisfied with their compensation, benefits, and overall jobs (financialfinesse.com).

It simply makes good business sense to get employees thinking about saving for the future and participating in your company’s retirement plan. If you have a 401(k) plan, for 2013, the maximum you may designate to your 401(k), not including any matching company contributions, is $17,500. If you are age 50 and older, you can contribute an additional $5,500. The total contribution limit, including employer contributions, is $51,000 or $56,500, including catch-up contributions. Now of course many people can’t afford to save at this rate but it’s likely almost everyone can find some way to save more than they are today – particularly if they aren’t participating in your company’s retirement plan.

Even if you don't max out your retirement plan to take advantage of the tax savings, you may want to review your retirement plan's asset allocation, investment options, and your contribution levels just to be sure that the plan fits in with your overall savings strategy.

If you need more information, the Employee Benefits Security Administration will be hosting two webcasts during America Saves Week. The first is for small employers who do not yet offer a retirement plan. This will be sponsored in coordination with the Small Business Administration and Consumer Federation of America and will discuss the benefits to employers as well as employees and will provide information about the many retirement plan options available. That will be held February 27th from 2—4 pm, Eastern.

The second webcast will also be for small employers and will focus on using the new retirement plan fee disclosures to select and monitor your retirement plan’s service providers. That will be broadcast on February 28th from 2—3 pm Eastern.
Information on both webcasts can be found at the Employee Benefits Security Administration website at http://www.dol.gov/ebsa/.


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