The State Financial Security Scorecards
research project gauges the retirement readiness of future retirees in each
of the fifty states and the District of Columbia.
Retirement Outlook Troubling; California,
Florida, South Carolina Rank Lowest While Wyoming, Alaska, Minnesota Rank
Highest
Webinar to Review Findings from Thursday,
July 30, 2015, Webinar. Watch a replay of the Webinar here.
September 1,
2015– A new
analysis indicates that Americans in nearly every state will fall far short
in meeting their economic needs in retirement.
The State Financial Security Scorecards research
project gauges the retirement readiness of future retirees in each of the
fifty states and the District of Columbia in three key areas: anticipated
retirement income; major retirement costs like housing and healthcare; and
labor market conditions for older workers.
The research finds that the lowest
ranking states include:
·
California due to low potential retirement income,
low workplace retirement plan access and high retiree costs.
·
Florida due to high retiree costs, low wages for older workers
and low workplace retirement plan access.
·
South Carolina due to low potential retirement income and
low labor market scores.
The highest-ranking states include Wyoming, Alaska, Minnesota andNorth
Dakota due to their relatively strong labor markets and lower
retiree costs. However, each of these states with a favorable outlook is weak
in terms of potential retirement income for retirees.
For example, North
Dakotans have an average defined contribution retirement account balance of
only $27,700 – nowhere near the level of accumulated savings required to
ensure self-sufficiency through retirement.
An interactive map with access to the State Financial
Security Scorecards is available here.
These state scorecards are designed to serve as a
tool for policymakers to identify areas of focus for state-based policy
interventions that will strengthen Americans’ ability to financially prepare
for retirement.
The State Financial Security Scorecard project provides
a two-page summary of the economic outlook for retirement security in every
state.
It considers trends in retirement plan participation rates in each
state, evaluates average savings levels in individual retirement accounts in
relation to median income and considers current poverty levels in each state.
“We developed the State Financial Security Scorecards to dig deep and
really understand the root causes of why future retirees will struggle in
some states,” said Diane Oakley, NIRS executive director.
“Now, policymakers
have a tool to identify the most urgent priorities and can take action to head
off the looming retirement crisis in their states,” Oakley said.
“The retirement savings shortfall has
become increasingly important at the state level because policymakers know it
can have a deep impact on strained state budgets.
The largest source of retirement
income for most Americans is Social Security, but this critical federal
program typically provides only a part of the income working families need to
be self-sufficient.
State programs must fill the gap and help Americans meet
their most basic needs for food, shelter and medicine.
The good news is that
some states like California and Illinois already have enacted legislation to
reduce future retiree poverty by encouraging workers to save today,” Oakley
added.
“Out of crisis comes opportunity. States
now are trying different ways to make sure that middle class workers don’t
fall into poverty once they stop working, which harms individuals and their
families,” said Kathleen Kennedy Townsend, Georgetown University Center
on Retirement Initiatives founder and former Maryland lieutenant governor.
“This new tool can help policymakers get a better read on financial security
issues in their state, and enact sensible policies to help Americans get back
on track when it comes to preparing for retirement,” she explained.
“This research project makes it
abundantly clear that achieving financial security in retirement is an
increasingly elusive goal for Americans,” saidHank Kim,
executive director and counsel with the National Conference on Public
Employee Retirement Systems.
“The findings give policymakers yet another
reason to explore innovative approaches, such as the Secure Choice Pension,
which draws on the documented performance and efficiencies of public sector
pension management, and extends it to those in the private sector,” Kim said.
The State Financial Security Scorecards come on the
heels of the NIRS 2015 public opinion research revealing that an
overwhelming majority of Americans (86 percent) believe that the nation faces
a retirement crisis.
Americans strongly support state action to address
retirement insecurity the research found: 71 percent said state sponsored
retirement plans are a good idea and 75 percent of Americans said they would
participate.
This State Financial Security Scorecard
project was conducted by Diane Oakley, NIRS executive director with support
from AARP.
The State Financial Security Scorecards build upon a 2014 research
report, The Financial Security Scorecard, authored by NIRS
and Dr. Christian E. Weller with the University of Massachusetts Boston.
The National Institute on Retirement
Security is
a non-profit, non-partisan organization established to contribute to informed
policymaking by fostering a deep understanding of the value of retirement
security to employees, employers, and the economy as a whole.
Located in
Washington, D.C., NIRS’ diverse membership includes financial services firms,
employee benefit plans, trade associations, and other retirement service
providers. More information is available at www.nirsonline. Follow NIRS on
Twitter @nirsonline.
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Tuesday, September 1, 2015
. State Financial Security Scorecards Reveal Retiree Economic Pressure
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