slide 8 in Jason's presentation

255 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
255
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

slide 8 in Jason's presentation

  1. 1. Special Initiative on Financial Literacy American Savings Education Council (ASEC) Fall Partners Meeting Jason J. Fichtner, Acting Deputy Commissioner Social Security Administration October 22, 2008
  2. 2. The Need for Financial Literacy <ul><li>The Social Security retirement benefit was designed to complement other sources of retirement income. </li></ul><ul><li>However, because of the increasing lack of financial planning and insufficient savings, people eventually find themselves relying mostly on their Social Security benefit in retirement: </li></ul><ul><ul><li>Social Security was the major source of income (providing at least 50% of total income) for 54% of aged beneficiary couples and 74% of aged nonmarried beneficiaries. </li></ul></ul><ul><ul><li>Social Security was the only source of income for 11% of aged beneficiary couples and 29% of aged nonmarried beneficiaries. </li></ul></ul>
  3. 3. Social Security Administration <ul><li>The Social Security Administration is in a unique position to help educate the public about the need to plan for retirement. </li></ul><ul><li>We have over 1,300 field offices across the country, a website that received over 54 million visits in 2007, a Social Security Statement that is sent to all workers each year, and a reputation for providing excellent service. </li></ul>
  4. 4. <ul><li>The Financial Literacy Advisory Group (FLAG) was created in November 2007 and includes about 50 individuals representing all parts of the agency. </li></ul><ul><li>The FLAG has focused on three issues to date: </li></ul><ul><ul><li>Replacing the “break-even age” with a new message </li></ul></ul><ul><ul><li>Using existing Agency communication vehicles for new financial literacy initiatives </li></ul></ul><ul><ul><li>Working with the Center for Retirement Research at Boston College to create an easy-to-use Retirement Guide similar to The Social Security Fix-it Book </li></ul></ul><ul><li>A separate advisory group of outside nonprofit stakeholders will also be established </li></ul>Overview of the Agency’s Current Efforts
  5. 5. <ul><li>The “ When to Start Receiving Retirement Benefits ” publication was released in July 2008 in conjunction with the Retirement Estimator. </li></ul><ul><li>The new fact sheet replaces the “break-even age,” which had been used to explain when to start benefits in terms of “being ahead” for a certain amount of time, with a new message that instead focuses on monthly benefit adequacy. </li></ul><ul><li>It also provides information on working in retirement, how your decision can affect your family, and the fact that retirement may last a long time. </li></ul>Replacing the Break-Even Age
  6. 6. <ul><li>Placing inserts in the annual Social Security Statement is inexpensive, has a wide reach, and can be targeted by age </li></ul><ul><ul><li>Would cost about $36,000 annually for each year of age (or $360,000 for a 10-year-age group) </li></ul></ul><ul><ul><li>About 150 million Statements are mailed each year to current and former workers age 25 and older </li></ul></ul><ul><li>Revised insert for workers age 55+ </li></ul><ul><ul><li>There would be no additional cost because the Agency already sends an insert to this group. </li></ul></ul><ul><ul><li>Reflects concepts in the new “When to Start Receiving Retirement Benefits” publication </li></ul></ul><ul><ul><li>Will go out starting October 1, 2008 </li></ul></ul><ul><li>New insert for workers aged 25-35 </li></ul><ul><ul><li>Will highlight the importance of Social Security and </li></ul></ul><ul><ul><li>encourage saving on your own at early ages </li></ul></ul><ul><ul><li>Is currently under development </li></ul></ul>Social Security Statement Inserts
  7. 7. <ul><li>Will be similar to The Social Security Fix-it Book: </li></ul><ul><li>The new guide will discuss the importance of determining how much income you will need in retirement and explains the basic retirement options. </li></ul><ul><li>Will be available online, may be mailed to individuals at certain ages, and could be distributed through other outlets as well. </li></ul>Easy-to-Use Retirement Guide
  8. 8. <ul><li>Welcome to the Workforce Guide —targets younger workers and helps them get the right start in terms of financial planning </li></ul><ul><li>Guide to Disability Benefits —helps individuals understand the disability process </li></ul><ul><li>Guide to the Ticket to Work —helps individuals understand work incentives and assistance for disabled individuals who wish to return to work </li></ul><ul><li>Guide to the WEP/GPO —to help individuals in non-covered employment understand the effects of government pensions on Social Security benefits </li></ul>Potential Future Publications
  9. 9. <ul><li>Use research funds through the Financial Literacy Research Consortium to develop and test new financial literacy products. </li></ul><ul><li>Examples from the Center for Retirement Research at Boston College: </li></ul><ul><ul><li>Create “events” by mailing the Statement out to certain age groups all at the same time </li></ul></ul><ul><ul><li>Create a Social Security Savings Guide and Mid-Course Correction Guide </li></ul></ul><ul><li>Examples from AnnaMaria Lusardi and Olivia Mitchell: </li></ul><ul><ul><li>Design financial education video games similar to those developed by Peter Tufano and Doorway to Dreams, Inc (D2D) </li></ul></ul><ul><ul><li>Create Understanding Risk: A Guide for Women </li></ul></ul><ul><li>Projects that are funded would be evaluated </li></ul><ul><li>for effectiveness. </li></ul>Potential Future Research & Development

×