Speaking of Savings

The saver’s credit is a tax credit worth up to $1,000 ($2,000 if married filing jointly) for mid-and low-income taxpayers who contribute to a retirement account. By reducing tax liability, the credit offsets the cost of funding a retirement account and can boost savings potential – for those who know about it. EBRI CEO Lori Lucas sits down with David John, Senior Strategic Policy Advisor, AARP Public Policy Institute, to discuss this well-intentioned, but often overlooked, program.

The financial impact of the COVID-19 pandemic was particularly pronounced for those who suffered a job loss. According to EBRI's Retirement Confidence Survey during the pandemic four in 10 workers who experienced income or job loss, said they could not handle a sudden emergency expense. Those same workers were more likely to call their debt level a major problem. Indeed, more than seven in ten in this group felt debt was negatively impacting their ability to save for emergencies six in ten  said it hurt their ability to save for retirement. In this episode EBRI CEO Lori Lucas speaks with Billy Hensley, Ph.D., President and CEO of the National Endowment for Financial Education about why financial literacy matters in an economic crisis. 

In this episode, Lori Lucas sits down with Kevin Robertson of HSA Bank to discuss the value of Health Savings Accounts.  How can consumers better leverage this sometimes misunderstood retirement vehicle by saving for the long-term and investing their savings, all while maximizing the tax benefits offered to this important class of accounts?  This episode examines the practical concerns many have about HSAs and how they can be used more effectively.

In this episode, Lori Lucas discusses the rampant problem of elder fraud. How can we best help preserve the life savings of older Americans and prevent victim blaming?  Kathy Stokes talks about some of the most common scams, the complexity of the problem, and how resources like AARP's Fraud Watch Network www.aarp.org/fraudwatchnetwork can help!

The credit card debt puzzle arises when people hold credit card debt and savings at the same time, because with few exceptions, any money held in savings is not earning interest at the same rate that their credit card debt is earning interest. A typical commercial bank interest rate on a credit card, is roughly 15 percent, while the interest rate on a savings account is near zero. Yet one-in-three people pay for expensive credit card debt by carrying a credit card balance from month to month, despite having excess cash that could be used to pay the debt down.  This episode focuses on a CFPB study, Balancing Savings and Debt:  Findings from an Online Experiment. Please note that this interview is for entertainment purposes only, and any opinions or views stated by Brianna Middlewood are her own and may not represent the views of the Consumer Financial  Protection Bureau. Her remarks do not constitute legal interpretation, guidance, or advice of the CFPB. Free CFPB Resources:My Spending Rule to Live ByMy Credit Spending Rule to Live ByOrganizing and Managing FinancesSavings Boot CampGet a Handle on Debt Boot Camp

Episode Notes:Lori Lucas explains the purpose of the podcast (00:18)What is emergency savings and what features are important? (01:55)How does having an emergency fund guard against retirement fund leakage? (03:15)What are the negative consequences of retirement plan leakage for employees and employers? (04:32)What constitutes an emergency, and what should we be saving our emergency savings for?  (05:45)Information on after-tax payroll deducted, emergency savings features within 401k plans (09:33) How can administrators communicate that the emergency savings feature in a 401k plan is in a separate mental bucket or envelope from their retirement accounts? (13:10)How can the financial services industry help people sort out competing savings priorities? (16:37)What are the characteristics of employers that are adopting after-tax payroll deducted, emergency savings features within 401k plans? (19:02)How can employers measure the success of emergency savings programs? (20:17)What are the lessons learned from COVID-19 in terms of emergency savings? (22:03)What should employers should be doing to ensure that employees are best leveraging emergency savings solutions? (24:11)What does Karen Inkel wish she knew at the beginning of her career, and how does it relate to emergency savings? (27:27)