Social Security Administration Announces Partnership
with the American Savings Education Council
and the Establishment of the
"National Save for Your Future" Campaign
Kenneth S. Apfel, Commissioner of Social Security, and Dallas L. Salisbury, Chairman of the American Savings Education Council (ASEC), today announced an expansion of their partnership to educate Americans about the importance of planning for their financial futures. SSA has unveiled a number of initiatives in the past year aimed at educating workers about the importance of retirement planning. ASEC is committed to raising public awareness about what is needed to successfully ensure long-term personal financial independence. The partnering of SSA and ASEC blends the key elements of a comfortable retirement - pensions and savings built on a foundation of Social Security.
"Americans need to make savings a personal budget priority," said Commissioner Apfel. "I like to say that your dreams for the future begin now. Social Security will be there for you tomorrow, but the rest is up to you. Retirement security depends on personal savings."
"We made significant progress in building awareness among Washington, DC-area residents since launching the Choose to Save© program in 1998," said Dallas Salisbury. "We have built a strong base of awareness in the community and we will concentrate our efforts on providing the hands-on savings and planning tips that help consumers prepare for financial security and retirement. The elements of this education program are ready to make this educational partnership successful nationally."
Commissioner Apfel and Chairman Salisbury also announced the creation of the "National Save for Your Future" campaign. Beginning October 2001, SSA and ASEC will join forces to annually remind Americans about the importance of saving.
· Financial Planners say that a person needs about 70% of their pre-retirement income to live a comfortable retirement. For the average worker Social Security replaces only about 40% of pre-retirement income, the balance must come from pensions and savings and investments.
· Hewitt Associates recently conducted a study of 170,000 distributions from defined contribution plans. Sixty-eight percent of plan participants who changed jobs in 1999 took cash withdrawals from their tax-deferred retirement accounts rather than leaving their money in the plan or rolling their balances into their new employer's plans or into IRAs. The highest percentage of cash payments, 78%, occurred among 20- to 29-year-old investors.
· ASEC's 2000 Retirement Confidence Survey reveals that 45% of American workers have not tried to calculate how much money they will need to save for a comfortable retirement. In addition, 69% of savers say they could save an additional $20 per week. "Americans need to be active participants in their financial future," commented Commissioner Apfel. "We want to help everyone make informed choices with their money and encourage all workers to begin saving today."
"With rapid medical advances and new thinking about U.S. life expectancy, growing longevity in the future may be much longer than is usually assumed - with significant public policy implications for Social Security and public policy as the baby boom generation begins to retire," said Salisbury. "If elderly mortality rates continue to decline at historical rates, life expectancy in the U.S. will increase to age 85 by 2070 - three years beyond SSA's current estimate. Continued expansion of financial literacy must be a national goal if Americans are to achieve economic security in their later years. This partnership approaches those goals."
Commissioner Apfel presented Chairman Salisbury with a Commissioner's Public Service Award. The Award recognizes ASEC for outstanding public service in partnering with SSA and for their commitment to ensuring that all Americans are aware of the importance of planning for a financially secure retirement.
SSA's partnership with ASEC is the latest in a number of initiatives that SSA has undertaken in the past year to educate workers about the importance of financial planning. SSA has entered its second year of mailing an annual Social Security Statement to all workers age 25 and older. The Statement provides customized benefit estimates and earnings information to individuals who are not receiving benefits. "Public feedback has told us that receiving a Social Security Statement is prompting millions of Americans to take action to better prepare for retirement," noted Commissioner Apfel.
During the past year, SSA launched an online Benefits Planner where people can go to get benefit estimates. In addition, the Retirement Planner portion of the Benefits Planner is linked to ASEC's Ballpark Estimate worksheet. The link to the Ballpark worksheet enables individuals to combine their estimate of future Social Security benefits with estimates of income from pensions and savings to determine if they are saving enough for a comfortable retirement.
"Instead of saving blindly, the Ballpark Estimate worksheet enables individuals to have a specific savings goal," said Don Blandin, President of ASEC. "Our retirement survey shows that 61% of workers who have tried to calculate their retirement needs say they are either ahead of schedule or on track when it comes to planning for retirement, while 68% of those who have not done the calculation feel they are behind schedule."
At today's event, SSA also unveiled a new public service announcement (PSA), "The Quiz Show," and ASEC showed one of their Choose to Save© PSAs. ASEC is joining with SSA to help place the PSAs where they will receive the largest, most age-varied and diverse audiences possible - in movie theaters across the country. In 1999, more than 1 billion people attended movies. Almost 85% of moviegoers are over 18, half of them between 18 to 50, at least a decade or more away from retirement but at a prime age for retirement planning.
"We think audiences of all ages will welcome information about one of the major concerns facing them - planning for their financial futures," agreed Commissioner Apfel and Chairman Salisbury.
NOTE TO CORRESPONDENTS: For more information about ASEC call Variny Paladino at 202-775-6321. For information about EBRI call Danny Devine at 202-775-6308. See also the "Save For Your Future" fact sheet.
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