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October 16, 2007
Podcast for 10/16/07: Interview with Pamela Perun
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Kim interviews Pamela Perun of the Aspen Institute about simplifying savings plans.
MP3 Download: Hi (128k) | Lo (24k)
Length: 18:50
Notes:
1:02 Pamela says that there are too many kinds of savings plans, leaving us with a complicated system of saving that individuals and employers have difficulty maneuvering through
1:36 The most common kinds of savings plans
2:50 Tax advantages are viewed as an incentive for people to contribute to these savings plans.
3:11 Pamela says that the tax advantages encourage those who pay higher taxes to save using these plans. She says there needs to be some kind of incentive to encourage those in lower tax brackets to save, too.
4:48 The differences between intermediary plans and open-access plans
5:55 Intermediary plans have been the most successful-- reasons may be psychological and practical
8:25 Pamela says IRAs have essentially been a failure -- people who don't have access to a 401(k) aren't likely to save in an IRA, either. Most IRAs are funded through rollovers from intermediary plans.
9:15 People do save, but not enough to fund a comfortable retirement -- and this is true across all income levels
9:40 Lots of people don't take advantage of their employer matches. Financial economists are researching which kind of match works best for which types of people.
10:38 Too many choices lead to "investment paralysis."
12:20 Savings plans are quite complicated, and they have numerous fees that not everyone is aware of.
14:25 Steps toward making the savings system better. Step one: Simplify. She suggests one plan for all types of savers, regardless of employer, etc.
15:20 We need fewer, but better, plans, she says.
16:22 Focus on outcomes. People don't save because they have no clue how much retirement is going to cost them, she says.
Resources:
The Aspen Institute, Initiative on Financial Security
"Toward a Sensible System of Saving"
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
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Kim Snider is an author, speaker and host of Financial Success Coaching, Saturdays at noon, on KRLD Newsradio 1080, Dallas - Fort Worth. This blog is primarily devoted to empowering individual investors with information to help them be good stewards of their money. Above all, it is about achieving true financial success. Kim's book, How To Be the Family CFO: Four Simple Steps to Put Your Financial House in Order is in bookstores now. Order yours from Amazon or other fine booksellers today.
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