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More Americans Use Retirement Plans

Published on April 16, 2014 by in Finance News

Getting ready for retirement can mean different financial strategies depending on the individual. Many people may be taking advantage of specific retirement plans such as a 401(k), which may put them in a better personal finance situation for the future.

Approximately 76 percent of Americans who have a 401(k) through their employer increased their contributions in 2013 compared to 2012, according to a report from Bank of America Merrill Lynch. This was 3 percent higher than the previous year's level. In the fourth quarter alone, more than 80 percent noted that they increased contributions.

"Thanks to advancements in the fields of medicine and technology, people today are preparing for a retirement that will likely be many years longer than any previous generation," said David Tyrie, head of retirement and personal wealth solutions for Bank of America Merrill Lynch.

Further financial education needed to improve retirement chances
Getting to a level where an individual can feel comfortable financially in retirement is important, but some may need to learn more about money before achieving this. According to a report from Genworth Financial, 60 percent of those polled felt that there is a relationship between being financially literate and ready for retirement.

However, there may be some gaps in actually reaching this point. The report noted that just 46 percent of Americans look to consume financial information to improve their knowledge of these topics. Of that group, a total of 45 percent felt that it was due to financial products being too complex. More than 35 percent explained that they don't have the time to look through these topics.

"It is not lack of access to information that is holding many Americans back from improving their understanding of financial matters," said Dr. Barbara Nusbaum, a New York-based psychologist and money coach. "Rather, it is a feeling of being overwhelmed – by the complexity of financial products, by the amount of time perceived as necessary to improve one's financial knowledge and a disconnect between financial needs and personal needs. An hour invested today in gaining the financial know-how that will make your life, family and money more secure will pay tremendous dividends over the long run."

Another issue is the general confusion among Americans about finances. The report added that approximately 18 percent were unsure about how to start learning about finances.

 
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Older Americans Worry About Retirement Prospects

Published on April 16, 2014 by in Finance News

Preparing for a secure financial future can be difficult for all ages, but there may be specific hurdles that baby boomers are dealing with that are making their situation specifically difficult.

Just 35 percent of baby boomers are confident that they prepared financially for their retirement, according to a report from the Insured Retirement Institute. When the organization began tracking this in 2011, the figure was 44 percent.

Approximately 25 percent of those polled explained they put off their retirement plans in the past 12 months, the report explained. Another 28 percent noted that they will not be retiring until they turn 70 years of age or older.

"One of the most striking developments since we began this research series is the decline in Boomers who did not know when they would retire," said Cathy Weatherford, president and CEO of IRI. "That number has been cut in half. While the research shows that they are deciding to retire later in life, the important thing is that they are grappling with important aspects of retirement planning and beginning to develop a clearer picture of where they are and where they intend to be."

Despite the issues, there are a number of people who are actively trying to save money. The report noted that four-fifths of those polled have some type of retirement savings, while close to 50 percent have at least $250,000 saved up.

A total of 55 percent of baby boomers explained that they have a distinct idea of how much they need to save for retirement, the report showed. One year earlier, the figure was just 55 percent of those polled.

Some Americans confused about retirement needs
The amount needed for retirement depends on a number of factors, and typically, is different for every individual. However, many people may not be completely sure of how to manage their situation. According to a report from Franklin Templeton, 92 percent of those polled felt that they would spend the same amount or less in retirement as they do now. However, nearly 40 percent haven't started saving money for their retirement.

"Americans have long struggled with preparing for the realities of retirement," said Michael Doshier, vice president of retirement marketing for Franklin Templeton Investments. "The survey uncovered several contradictions related to the degree of understanding and often divergent approaches to retirement."

 
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Women Deal With Many Financial Difficulties

Published on April 15, 2014 by in Finance News
Some women are dealing with difficult financial situations.

Some women are dealing with difficult financial situations.

While many Americans are looking to create a financial strategy that can both help them now and in the future, there can still be some pitfalls to avoid. A number of women may be dealing with specific issues that could make personal finance issues even more difficult. Read moreā€¦

 
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