Data & Research July 22, 2011

Most Americans Missing a “Plan B”

A recent study from State Farm found that fewer than fifty percent of Americans have a financial back-up plan in place.
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In State Farm’s “Financial Plan B” survey, 81% of respondents agreed that having an alternative financial plan is very important, but only 45% claim to have planned for a future crisis. Additionally, many Americans have not prepared for short-term financial difficulties, and even more expressed doubts about their retirement plans. 

Key findings of the survey include:  

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  • 35% of Americans say they have funds on hand to meet financial needs for up to three months, and 15% do not have funds to meet commitments beyond a single month
  • 54% reported would accept a lower-paying job than the one they currently hold if they were out of work for six months or fewer
  • 61% admitted they would take money from a 401(k) or other employer-sponsored retirement savings vehicle as part of their Plan B, 34% would downsize their home and 22% would move in with family
  • Almost 25% of future retirees think they will be able to retire at age 60, but the same number doubt they will ever be able to retire
  • More than 60% of Americans say they will not be able to retire without Social Security and/or Medicare as they exist today

“With the economic downturn and concerns about continued slow growth, it’s critically important that people take a clear-eyed look at their financial situation and develop realistic options they can have in place should unexpected financial difficulties pop up,” said Joe Monk, senior vice president and chief administrative officer, State Farm Life Insurance Company.

Given these uncertainties, State Farm recommends the following tips to help prepare against the damaging effects unexpected life events can have on savings and retirement plans:  

  • Start the conversation with loved ones 
  • Work with someone you trust 
  • Put your plan in writing 

Harris Interactive conducted the telephone survey for State Farm between May 6 and May 16, 2011. A nationally representative sample of 2,017 U.S. adults aged 18 and older were asked to consider their financial readiness in the face of a major life crisis such as loss of a job, a divorce, the unexpected death of a spouse or partner, or a catastrophic illness that leaves someone unable to earn an income. 

Products July 22, 2011

Women's Group Releases MEP 401(k)

The U.S. Women’s Chamber of Commerce (USWCC) is launching several financial and business service enterprises, including a Multiple Employer Plan for female small-business owners.
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The USWCC reports its new services aim to give women more control of their financial future. The first product being offered as part of USWCC’s initiative is SmartRETIRE 401k. USWCC says that too often, female small-business owners have not been offering retirement plans because of their traditionally higher costs and administrative burdens. SmartRETIRE 401k is a Multiple Employer Plan 401(k), available to business members of the U.S. Women’s Chamber of Commerce.  A Multiple Employer Plan, or MEP, is a single Qualified Retirement Plan housing multiple “adopting employers” with common retirement savings objectives (see “Transamerica Believes MEPs Can Provide Growth for Advisers“). 

SmartRETIRE401k is a flexible plan with independent investment management (Morningstar Investment Services), low costs to start and run, reduced fiduciary risk, and the ongoing education and support of the U.S. Women’s Chamber of Commerce and USWCC Money, LLC.

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‘”Over the last century, women’s economic clout and industry leadership has grown dramatically,” says Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce.  “Women have gone from the home to the office into business ownership and political leadership.  Now, we open the next frontier — leadership and control of our own national financial and business service enterprises that put women in the driver’s seat for retirement planning and business growth.”

The USWCC is also introducing USWCC Money, LLC (a registered investment adviser providing retirement planning and investment advisory services), USWCC Financial, LLC (providing business and personal financial services), USWCC Insurance, LLC and USWCC Business, LLC (providing business solutions, ecommerce stores and malls).

The USWCC is a not-for-profit 501(c)6 organization founded in 2001; its headquarters offices are located in Washington, D.C.   

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