by Kathryn Kretschmer-Weyland
May 29, 2006

As the face of retirement is constantly changing, current and future retirees must take into account the varying costs that will arise and affect other retirement goals. Whereas an individual’s plan for his or her retirement years might include extensive travel or relocation to a new region, that individual must remember to take into account other costs that will financially impact them and possibly hinder overall ability to realize longtime goals.

According to the Spring 2006 findings of the Retirement Education Institute (REI) created by Platinum Member Nationwide Retirement Solutions, many public employees are aware of incidental expenses that could arise during retirement, but there is a distinct disconnect between knowledge and action. REI attributes this disconnect to general feelings shared by employees that the exact income necessary for retirement is difficult to understand and estimate, payoffs are too distant in the future, realizing pleasure in retirement means pain now, there is no tangible penalty for not saving today, and deadlines like a retirement date are arbitrary. These sentiments give explanation to the fact that not enough of the American workforce is adequately planning and saving for their retirement years.

Beyond these psychological barriers to saving, many workers are hindered by complex or numerous investment choices and lack of consumer knowledge and trust towards financial companies. REI found that attitudes towards savings are often ingrained early in life and saving behaviors often reflect attitudes learned from parents and previous generations. Workers from family backgrounds where saving was valued and taught are more likely to consider the importance of planning for the future and will start earlier and save more for retirement, often up to the maximum allowed. These workers will also show more confidence and make more rational decisions in regard to investments and savings.

However, because many workers do not come from backgrounds that emphasized savings does not mean that these workers cannot escape this cycle and adequately prepare for retirement. When provided with the appropriate tools for retirement planning, workers are better prepared to make the decisions that appear tough and intimidating. The deferred compensation program offered by The United States Conference of Mayors and Nationwide Retirement Solutions offers public employees the education and tools to be actively involved in ensuring the reality of their retirement goals. Through this program, city employees have access not only to Nationwide retirement specialists, but to a myriad of information and educational tools on the internet, designed to further teach plan participants how to save, and how their savings will translate into comfortable retirements. Many American workers are currently not saving adequately because of misconceptions and lack of financial knowledge and trust, but Platinum Member Nationwide Retirement Solutions is working to change those statistics.

For more information on how the Conference and Nationwide’s 457 program and its educational components can better equip your city’s employees for retirement, contact Katie Logisz with the Conference at 202-841-0775 or klogisz@usmayors.org. You can also contact Kathryn Kretschmer-Weyland at 301-460-5251. Information about this program is available online at www.usmayors.org by visiting the Nationwide link.