DES MOINES, IOWA – Iowa Insurance Commissioner Doug Ommen announced today that the Iowa Insurance Division (IID) is launching its Save4Later financial wellness and retirement security program to provide Iowans with tools and resources to plan for retirement and save for a financially secure future.
“Whether you are 25 or 65, it is never too late to start planning and saving for retirement,” said Commissioner Ommen. “We know from a recent AFCPE survey that 37% of Iowans have less than $5,000 saved for retirement, with many citing that they do not have sufficient retirement planning knowledge to feel comfortable contributing to a retirement plan.”
The Save4Later website has valuable information on retirement planning, budgeting and debt reduction, and saving and investing, along with short courses, calculators and videos to make getting financially fit fun, according to Ommen. There is an assessment tool to guide users to the right courses based on their existing knowledge of financial topics and leads them to build upon this base of knowledge.
The AFCPE survey also found that 51% of Iowans were carrying credit card debt. Ommen noted the survey was administered prior to the pandemic and said credit card debt could be worse now considering the number of families who have been negatively impacted financially by the pandemic.
“I think the pandemic crisis has really brought to light the need to manage debt and build an emergency fund,” said commissioner Ommen. “We knew that many of our state employees who were on the front lines serving the public during the crisis were facing financial stress. IID was awarded a $100,000 National Association of State Treasurers’ Foundation grant to roll out the Save4Later program first to Iowa state government employees as a resource for them and to help us pilot the program.”
According to national poll conducted by the Center for State and Local Government Excellence (SLGE), 56% of state and local public employees have been negatively impacted financially by the COVID-19 crisis. State of Iowa government employees have already completed more than 1,000 Save4Later courses in the program’s first month and employees are finding it to be a helpful resource.
“The Save4Later website has free, rock-solid tools and is a valuable resource for retirement planning for my wife and me going forward. I also found some important information and links to share with my adult kids,” said Eric Preuss, manager of the Iowa Department of Public Health (IDPH) Iowa Gambling Treatment program. “There were some great nuggets I learned from taking the courses. I have been able to better position us as we work on our financial goals and retirement plan.”
Nearly half of Iowans are not planning for retirement and 39% are planning to live off social security in retirement, according to the AFCPE survey. That means many will need to continue to work instead of retiring to supplement the just over $18,000 average annual social security income.
“For many Iowans, meeting the financial demands of today means delaying saving for tomorrow, but saving just a little money now can be a huge help later,” said Sonya Sellmeyer, consumer advocacy officer for IID.“It’s important to put away some amount of money — preferably in a retirement savings vehicle offering a higher interest rate, such as a an IRA or a 401(k), especially if your employer contributes to the fund.”
By trading spending habits like the daily $5 latte or that weekly $35 dinner out for investing habits early in life, one can achieve remarkable results, according to Sellmeyer.
“Investing just $5 a day over 50 years with a 6.5% annual return would net one nearly $700,000 for retirement — if your employer match added another $3 per day, you would have over $1 million for retirement,” said Sellmeyer. “If you start saving today, your money can go to work for you by compounding interest to build you an emergency fund or a sizeable nest egg to retire.”
According to a Transamerica study, it is not just financial security that makes one happy in retirement, but also a strong sense of purpose. People are redefining what retirement looks like to them, with many choosing to delay retirement by becoming self-employed or starting a fun second career. The study cites people who are looking for a meaningful retirement with a flexible work-life balance and socialization opportunities, so they can delay taking social security benefits and grow their nest egg for a more enjoyable retirement later in life.
“Whether or not you need or want to work later in life, those ‘golden years’ will be a lot shinier if you start thinking about them now,” said Commissioner Ommen. “I encourage all Iowans to visit http://www.Save4LaterIowa.com and take advantage of all these great resources, calculators and more than 60 free courses to get you and your family on the right track to achieve financial stability and a secure retirement. If you are already in retirement, we offer up some ideas to maximize your sources of income, stretch your retirement dollars and other tips to live a healthier life with less stress in retirement.”
About the Iowa Insurance Division
The IID has general control, supervision and direction over all insurance and securities business transacted in the state and enforces Iowa’s laws and regulations. The IID investigates consumer complaints and prosecutes companies, agents and brokers engaging in unfair trade practices. Consumers with insurance or investment questions, or complaints, may contact the IID toll-free at 877-955-1212 or visit http://www.iid.iowa.gov.
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