were engaged and their feedback on Retiremap. Financial Wellness Data on employees’ savings rates, financial goals and debt issues. Retirement Readiness See how employee retirement readiness compares across demographic groups. Demographic Differences Dive into the differences between employees’ goals and investing approaches. Next Steps Review of what comes next and areas for considering additional support. 2 2
Gen X (’65-’76): 39% Millennials (’77-’92): 38% Employees engaged by generation 58% of engaged employees are married 54% of engaged employees own a home 67 years old is the average anticipated retirement age 4 4
increase their paycheck deferral rate 5.7% of pay was the average deferral increase request 13% of employees are interested in auto- escalating their paycheck contribution 5 5
the 401(k) plan 90.2% I now feel more prepared to work on my financial goals 88.6% I now have helpful tools to reduce stress related to my personal finances 93.2% I would recommend the workshop to a co-worker 96.8% I plan to increase my savings rate through my retirement plan 92.7% I am more interested in meeting with an advisor from Plan Advisor Firm 74.1% I am more prepared to take the next step to improve my financial wellness 96.2% This new financial wellness program is an excellent addition to the benefits package 97.6% I consider financial education to be an important employee benefit 100.00% 6 6
42% Saving 0-5% of household pay Saving 6-10% of household pay Saving 11-15% of household pay Saving 16-20% of household pay Saving more than 20% of household pay Household Savings Rates 32% of engaged employees have CREDIT CARD debt 28% of engaged employees have STUDENT LOAN debt 41% of engaged employees have CAR LOAN debt
Eliminate Debt Invest Better Buy a Home Emergency Fund 71% of employees 43% of employees 41% of employees 36% of employees 35% of employees Other Top Goals: 31% of employees 28% of employees 21% of employees 19% of employees 17% of employees
Baby Boomers 42% 32% 47% 41% 8% 29% 15% 19% 27% 18% 25% 22% 23% 21% 13% 18% Scored Less Than 25 (Least Prepared for Retirement) Scored 25 - 49 Scored 50 - 75 Scored 75+ (Most Prepared for Retirement) Retirement Readiness - February 2015 9 Assumptions Used to Calculate Employee Retirement Readiness The following assumptions were used to calculate retirement readiness: Inflation Rate: 3% Success rate of Monte Carlo simulations for non-retirement years, based on portfolio type: 75% Replacement rate for income at retirement (only meets basic needs, not retirement goals) First five years of retirement: 65% Early middle retirement: 55% Late middle retirement: 45% Last five years of retirement: 55% Percentage of retirement assets that are tax deferred: 50% Rate of return on investable assets in retirement (after tax): 5% 9
a Home Invest Better Eliminate Debt Emergency Fund 71% of employees 38% of employees 51% of employees 42% of employees 41% of employees 32 years old is the average age. 11% 7% 21% 23% 39% All cash Mostly bonds and cash Half stocks Mostly stocks All stocks How Millennials are investing 33% Own a home 28% Want to save more Top 5 Financial Goals
Goals 12 12 Save for Retirement Eliminate Debt Emergency Fund Save for College Buy a Home 71% of employees 31% of employees 45% of employees 40% of employees 31% of employees 45 years old is the average age. 10% 33% 21% 12% 24% All cash Mostly bonds and cash Half stocks Mostly stocks All stocks How Gen Xers are investing 61% Own a home 47% Want to save more
for Retirement Invest Better Reduce Spending Minimize Taxes Long Term Care 82% of employees 28% of employees 64% of employees 34% of employees 33% of employees 56 years old is the average age. 9% 18% 23% 32% 18% All cash Mostly bonds and cash Half stocks Mostly stocks All stocks How Baby Boomers are investing 77% Own a home 48% Want to save more Top 5 Financial Goals
support. 14 14 Step 1: Email campaigns We will start with targeted emails to engaged employees based on the financial goals selected and issues identified. Step 2: Personal finance webinar Based on the issue that the committee feels is most pressing, a CFP® with Retiremap will offer a live webinar. Step 3: Evaluate addressing debt Retiremap uncovered that 49% of employees had either student loan or credit card debt, with 11% having both.
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