Donald W. Reynolds National Center For Business Journalism

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Three ways your readers can save more money for retirement

April 18, 2019

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Many Americans make savings one of their New Year's resolutions. This data should jump-start a business story. ("Attack of the Piggy banks" image by "Low Jianwei" via flickr, CC B Y 2.0)
Looking to report on retirement savings? Use these angles to show your readers three ways they can save more. (Image via flickr user Low Jianwei)

Contribution limits to qualified retirement plans for U.S. workers increased in 2019. U.S. workers can now save up to $19,000 in a qualified plan (a 401(k) or 403(b) plan, most 457 plans, and the federal government’s Thrift Savings Plan), $6,000 in an Individual Retirement Account, and an additional $1,000 if they’re 50 and over.

But here’s the challenge: Most workers don’t even come close to those numbers. The Employee Benefit Research Institute’s 2018 report shows that only 60% of workers are saving for retirement. Workers are also not saving enough.

The average personal savings rate touched only 6.0% in November 2018, according to the U.S. Bureau of Economic Analysis. Financial advisors recommend saving 15%, with a target of having saved eight to 10 times your annual salary by retirement.

Business reporters can help get their readers’ attention by offering one or more of the following angles to consider:

Get Smart and Fool Yourself

Assemble a panel of readers of different ages and incomes, along with human resources specialists from small-, medium-, and large businesses in your area to explore solutions. Here are three:

  1. No one wants to live on a smaller paycheck, but there’s a way to increase your 401(k) contribution and save more, too. If you get a 4% raise, save 2%, which guarantees that you’ll get a larger paycheck.
  2. Capture all of your employer’s match. A May 2015 report from Financial Engines calculated that one in every four workers is leaving $1,300 a year on the table by not getting the full match from their employer. The latest research in 2017 from Alright Solutions shows some improvement, but one in every five workers still isn’t getting the full match. Contact MacKenzie Lucas at (224)-737-1158 for the report.
  3. Take credit. Your low- and middle-income workers may not be taking advantage of the Saver’s Tax Credit, according to 2017 research from the National Institute on Retirement Security (NIRS). From 2006 to 2014, NIRS found that only 3.25%-5.33% of all eligible filers claimed the credit. Have a Certified Public Accountant on board to explain the law to eligible workers.

Get Healthy   

We’re talking Health Saving Accounts (HSAs), which are triple tax-free and allow you to roll any dollars left over into the new year (unlike a Flexible Spending Account). Keep going from year to year, and you can even use the money to pay for health care expenses in retirement.

How many of your panel participants have access to an HSA and are funding one?  According to the most recent research from Fidelity, the average 65-year-old retiree can expect to pay about $5,000 ayear for health care premiums and out-of-pocket.

Get a Second Job                                 

The “gig economy” is growing, according to the Government Accountability Office (GAO), which estimates that 40% of U.S. workers are employed in part-time jobs. For full-time workers whose paychecks are stretched thin, a part-time job can fund an IRA. How does this trend reflect in your zip code? Ask your readers.

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