Are you leaving cash on the table?

That adds up!

Employer match + growth can make up to one-third of total retirement savings.

Our new research shows many American employees aren’t taking full advantage of an employee benefit that puts money in their savings.

Are you one of them?

Take a look at the facts and figures in the infographic and then our quick run-down on what you can do to get all of the money your employer is offering you.

Risk Tutorial: Why Your Attitudes About Risk Are Important

If you’re eligible for Financial Engines, you have access to help managing investment risk. This tutorial provides you with easy steps so you can start taking action. We encourage you to visit your Financial Engines account and start using our advice to help grow your retirement savings.

The Big Play: Deciding About Risk

There are two factors that impact how much risk you can and should have in your portfolio: your attitude and your age. Your overall tolerance for risk can be high, low or somewhere in between. It depends on your point of view – are you aggressive and therefore willing to take more risk? Or conservative and semi-risk averse?

Every investment carries some amount of investment risk (which means you can lose money), but some have more risk than others. As a general rule, investments in stocks are riskier than bonds. Some investments (like company stock) carry a lot more risk. We base our investment recommendations on your tolerance for risk – which you can change at any time. Visit your account to specify your risk tolerance and we’ll adjust your investment advice accordingly.

Secret Weapon: Age matters.

Yes, your age makes a difference. Is your portfolio age appropriate?

Often, if you are younger, you can tolerate more risk since you have time on your side. If you are older, you may want to be more conservative since you won’t have the time to earn back your losses before you want to retire. It can be confusing, but we give you advice that maps to your age and your personal preferences so your 401(k) is optimized for the best growth possible. Visit your account to see your current level of risk and make adjustments if it’s not right for you. If you need help, we’re here for you.

Do Something Today

Follow this easy, simple plan and put your money to work.

* Within the Help group managed accounts and online advice are provided by Financial Engines Advisors L.L.C. The data for the research are drawn from 14 large 401(k) plans. All returns reported in the research are net of fees, including fund specific management and expense fees, and managed account fees. Please access the report for a full description of the methodology and data used.

 

 

Budgeting in retirement: How to evolve your plan.

Here’s the challenge: we all know we need to plan for retirement, but it’s hard to know how much we’ll really need to live comfortably once we get there.

It’s easy to get lost in a sea of online calculators with competing viewpoints and worrying about how long your money will last. As it gets more complicated, you may be tempted to give up. And that’s why we’re here.

We can help you estimate your budget for retirement based on what you already know today.

Budgeting differently for retirement.

The most common benchmark for figuring out how much money you’ll need in retirement is based on using a percentage of your current income. This is maybe the easiest way to get a ballpark estimate that maps to your current lifestyle. Alas, this method doesn’t take into account how you may want to change your lifestyle in retirement — like traveling more or accommodating health concerns.

So you’ll still want to do some tried-and-true budget projections.

This time, you’ll need to pay special attention to how your life could change after retirement. You’ll want to include line items for things Medicare won’t cover, those extra travel plans, and, if you can and would like to, gifting money to people or causes you care about. Don’t forget to budget for unexpected expenses and the possibility of inflation. You can see historical inflation trends here to get an idea of how costs might increase over time.

Planning for your life expectancy.

Knowing what you’ll want to spend is one thing, but getting your mind around how long you’ll be here to spend it is quite another. When it comes to time, there are two key considerations: When do you plan to retire and how long do you think you might live?

Deciding when to retire has major implications for retirement funding. The longer you work, the more years of earning you’ll have to fund your retirement.  On the other hand, the earlier you retire the more time you’ll have to enjoy your retirement. If you plan to retire early, you’ll need to plan for an aggressive retirement funding strategy (saving more and investing wisely) to ensure you can sustain your lifestyle over a longer period of time.

Knowing the age you plan to retire can help you strategize about how much you need to save and how long your savings will need to last to sustain you. Keep in mind, however, that sometimes the decision to retire is not entirely in our hands. Having a plan is good, but having a back-up plan is just as important.  If you have access to Financial Engines, we’ll help you figure this out.

Another factor is life expectancy. While we all dream of a long and healthy life, that translates into years when you’ll need to support yourself. The longer you live, the longer your retirement savings will need to be able to sustain you. How you figure this out is very personal, but you can start with taking into account your family’s health history, the lifespan of your parents, your health now and your attitude about getting older.  Since no one knows for sure how long they will live, our Social Security planner takes a variety of possible scenarios into consideration when recommending claiming options.

What if your financial picture doesn’t look like it should?

We have help for you. You can start with some reading – we’ve provided a list of interesting articles below. And if you’re eligible for Financial Engines, our investment professionals are available to create a personalized Retirement Evaluation that can help you see where you want to be financially and how to get there. They can also complete a full Retirement Check-up. If you don’t have access to Financial Engines, try our Social Security planner at no charge. We also recommend that you get additional help from a licensed fiduciary.

 

Tap the Power of Budgeting to Help You Get Ahead Financially

Living with a budget doesn’t have to be intimidating – it’s as simple as knowing what you have, what you spend, what you can save and what you can invest. It’s a tried and true method for helping you reduce or eliminate debt, ease financial stress, and if you stick to it, put you on the path for building wealth.

While the elements of budgeting seem simple on paper, we understand it can be a challenge. The goal is to start getting an honest picture of your financial situation and then slowly make adjustments so you can eventually realize your long term financial goals.

What Are Your Financial Goals?

Before starting your budget, take a moment to review your short and long term financial goals.  Short term goals may include things like vacations or a new car, while long term goals include things like retirement, buying a house or saving for a child’s education. As you look over your list, ask yourself: how important is each of these goals?  How much would I need to save to achieve this? Based on your priorities, you can build each of these goals into your budget to ensure that you are contributing to them regularly.

Read: Ten Tips for Saving for Retirement

The One, Two, Threes of Creating a Budget

1. Income. Start with looking at your monthly income and expenses. List all of your income. Don’t forget to include any other types of income like child support or investment interest.

2. Expenses. Once you know how much money you bring in, list your expenses. We recommend creating two categories: fixed expenses and discretionary expenses.  Fixed expenses are regular costs like rent or a mortgage, groceries, and utilities and anything else that you have to pay for every month. Don’t forget retirement.  Since retirement is your responsibility, this should definitely be considered a fixed expense as well. Be sure to include saving for your retirement. Our research shows that folks who procrastinate face serious consequences in retirement.

Discretionary expenses are things that are optional, like vacations and entertainment (yes, still very important, but if you had to cut back, this is where it would happen). You’ll also want to try and capture your irregular expenses like insurance, property taxes and car maintenance so that you can plan for them by making monthly contributions toward those items.

3. Balance. Now that you have all of your information in one place, take a step back and evaluate your income and expenses. The goal is to make sure the money coming in is greater than the money flowing out. If possible, you should try to set aside money to contribute to an emergency savings fund, and those long term goals you identified for yourself (like buying a home, college savings, etc.)

Staying on Track

Call-an-advisorThe most important part of any budget is staying on top of it.  If you need help, there are plenty of great mobile apps and software solutions designed to help you maintain and track your budget. With some effort, living with a budget can support you in understanding your spending habits, curbing bad habits, creating savings and helping you achieve long term financial goals.

If you are eligible for Financial Engines, we can help. Call an advisor to discuss how to balance your short term expenses with your long term goals. We want you to retire well.

Financial Engines Expands Access to Our Investment Advisors

Last week, we announced that we are expanding access to our experienced investment advisor representatives. Now, anyone with access to Financial Engines services through their employer can pick up the phone to talk with an advisor at no additional charge.

See if you are eligible for Financial Engines.

You can now talk with one of our advisors whether you have already started using our service or are simply considering it. Previously, access to our advisors was a feature for those enrolled in the Financial Engines managed account program. We will be rolling out this service with different employers into 2016, but don’t let that stop you if you’re ready to call.

Read The Wall Street Journal: Financial Engines to Offer 401(k) Savers Free Access to Advisers

Our experienced, licensed advisors provide you with personal, unbiased help with retirement plan accounts, income planning and a variety of financial topics. You can talk with an advisor on the phone, via webcam and live chat. Our advisors are non-commissioned and do not sell investment products.

Read Investment News: Financial Engines to Offer More Access to Human Advisers

Not sure where to start? Our advisors can talk with you about your specific situation, including analyzing your retirement plan and outside accounts, savings rate recommendations, and assistance with Social Security claiming strategies. In addition, you can get help with a variety of other topics that can impact your financial wellbeing.

Read BenefitsPro: From Robo-Advisors to Human Advisors

If you’re still unsure about calling an advisor, watch this short video to see how simple it is. We look forward to hearing from you!

Contribution Tutorial: How to Harness the Power of Your 401(k) Contribution

If you’re eligible for Financial Engines, you have access to savings help. This tutorial provides you with easy steps so you can start taking action. We encourage you to visit your Financial Engines account and start using our advice to help grow your retirement savings.
The Big Play: The Power of Company Match

We recently conducted a study finding that regular people – just like you – are leaving a significant amount of money on the table. The numbers are fairly staggering, totaling 24 billion dollars a year. What exactly is this money left on the table? It’s your company 401(k) match – the money your company is willing to invest in your future. Younger people are much more likely to be missing out.

Are you getting everything you’re entitled to? Call us to find out.

Your Secret Weapon: Painless Contribution Increases.

Steadily increase your contribution with each raise or new job.

If you get a new job or a pay increase, pay yourself first. The idea is that you start increasing how much you are saving in your 401(k) until you are getting all of your company’s match. And then, push yourself to hit your maximum contribution rate to grow your savings even faster.

Because these are pre-tax dollars, you’ll find it really won’t hurt that much. Talk with your HR team to make the change. They can help you run the numbers to understand how these small changes really don’t have a huge impact on your take home pay.

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Credit basics: How credit can affect your financial health.

Credit can be incredibly important to your financial health, but it can just as easily spell trouble. It allows you to get the big things you need — like a car or a home — and the little things you want. But if it’s mismanaged, it can quickly do things to your financial reputation that may take years to repair.

Our goal is to help you save for your retirement but if you are worried about debt, you might make choices that could get in the way of your ability to save. Here are a few things to keep in mind when considering using credit.

Credit terms are designed to keep you paying, not saving.

Credit was designed to help you when don’t have enough money to purchase what you’re after by turning what would be a large payment into smaller monthly ones. The problem is that as the amount you owe increases, so does your monthly payment, because additional charges and interest compound.

What may have started out as a small monthly payment may grow into an unmanageable monthly burden and here’s why: minimum payments are designed to cover the interest first. That means you may not be decreasing the original amount owed, which increases the length of time you’ll need to pay down your debt. You’re paying interest on your outstanding balance, but not paying down the principle. Miss a payment and your credit score suffers, making it more difficult for you to get credit the next time you might need it.

Daily Finance has five simple rules that can help you manage your credit successfully.

Interest makes getting a loan possible, but interest isn’t your friend.

Credit gives you access to money you don’t have, and in return, the lender will ask for a percentage of what you borrow — the principle — and that’s your interest rate. Rates can vary wildly based on many factors including the type of purchase, the amount you want to borrow and your credit score (these five rules spell it out).

Often, to get new customers, lenders will offer very low introductory rates, which will increase to a market rate after a certain period of time. You need to look for that information and take note. For example, a credit card might start with 8% interest for 90 days and then jump to the national average of 15%! That rate is applied to whatever balance you still owe. In many cases, rates can be shopped or negotiated — it’s in your best interest to be proactive when it comes to interest rates.

In an effort to avoid high interest rates, some people game it — by moving their balances from one introductory offer to another, leaving before the higher rate kicks in. While this may sound clever, it can be a risky strategy. You’ll need to be very diligent in understanding a lender’s terms on different balance types, activities and commitment terms, as lenders don’t want you to do this and are making it harder and harder to do so.

Once you have credit in place, make sure you monitor how it’s being used.

As identify theft and credit card fraud continue to escalate, be on the lookout for unauthorized purchases, application approvals or denials you did not request, or applications submitted in your name.  Always sign your cards (or write “please see ID” on the signature line), don’t give out card or account information over the phone and work with your lender to safeguard your accounts.

We want you to have a balanced financial life with the ability to save for the things that matter — like your retirement — while moving ahead with the things you want. Credit can be an extremely useful tool when things are tight or you’re ready to make a big purchase. If you plan ahead and factor in the interest charges and fees, credit can be an important tool that can help you do more with what you have.

If you like this article, you might also like: Five Things You Need to Know About Credit Reporting

The Financial Impact of Preparing for Baby

Preparing for the arrival of a child is one of life’s most exciting experiences It can also be a lot of work.

Whether you plan to adopt or are expecting, a child is a lifelong investment. There are plenty of financial considerations you should take into account that will help you embrace your new arrival while not neglecting the long term goals you have for you and your family.

The Immediate Need(s): Budgeting and Planning

Let’s start with the basics: your budget. If you don’t already have a budget, now is the time to create one. When it comes to kids, the costs can add up quickly: strollers, cribs, high chairs, and car seats– just to name a few. In addition to the one-time items, you’ll also have ongoing expenses like formula and diapers, which will impact your monthly budget. Planning ahead and anticipating the costs will allow you to be prepared for changes to your monthly spending.

And it doesn’t end there. This is also a great time to consider saving for college. While college may sound a long way off, it’s never too early to start planning. The sooner you add a line item for college savings into your monthly budget, the more options you’ll have when it’s time to send your child off to college. Starting now can help make the task feel more manageable and less daunting.

Also, don’t forget to factor in the expense of childcare. While it may seem farfetched to have a stay-at-home parent, often the cost of childcare exceeds the additional income of a second working parent. If you’re single and plan on working, childcare will be necessary, so figuring out how to structure what you’ll need is important. Child care can have a huge impact on your household budget so factor that in early.

The Long View: Retirement, Estates, Insurance and Taxes

Let’s get to the not so obvious financial aspects of having a child: getting your affairs in order.

Too often new parents make the mistake of pulling back on retirement saving to accommodate the expenses associated with having a child. Because of the tax benefits associated with savings, plus the “free money” you get from your company’s match, this could be a costly decision. Work with your financial advisor to figure out the best way to keep saving even though your daily expenses will increase (if you are a Financial Engines customer, we can help).

Making decisions about estate planning, such as guardianship and life insurance policies, are all things you can do right now. It’s important to know that your family will be taken care of if something happens to you, and preparing now can help bring peace of mind later.

In addition to life insurance, you’ll want to update your medical insurance to cover your new baby when he or she arrives. While you’re at it, don’t forget to check on what is and isn’t covered and begin putting money aside for the uncovered expenses after your child arrives.

Yes, having kids is an expensive prospect, but it’s not all an expense. You will also be eligible for some tax breaks as well. Contact a tax professional to help make sure that you get the most out of these exemptions before you file.

Smiles, Kisses and Lots of Hugs

Becoming a parent is an extraordinary privilege that comes with a great deal of responsibility. As you work to keep your baby happy and healthy, we’ll be here to help you keep your financial wellbeing on track.

401(k) Tutorial: Easy Investing Tips to Put Your Money to Work

If you’re eligible for Financial Engines, you have access to investment help. This tutorial provides you with easy steps so you can start taking action. We encourage you to visit your Financial Engines account and start using our advice to help grow your retirement savings.

Getting Started: Make Sure Your Money is Invested

So often, people contribute to their 401(k) but then they stall out when it comes to investing it. Your 401(k) account lets you choose from several investment options offered by your plan. You’ll see your choices when you go to your Financial Engines account.

Investing can be confusing, and that’s why we’re here. We provide investment advice based on what you’ve told us about yourself (check your profile to make sure it’s up-to-date). Depending on your comfort with investing, you may decide you need help. That’s when you should call us.
We’ll help you get on track.

The Financial Engines Advantage: Get Help.

You don’t have to do this alone. If you get help, you may do even better.

Here’s the bottom line: we did a study with AON Hewitt and found that people who participated in their employer’s 401(k) plan and used some form of professional help did better than those who chose to manage their portfolios on their own.*

In fact, we observed that more than 60% of 401(k) participants who didn’t use help had portfolios with inappropriate risk levels. Of those, approximately two-thirds were taking on too much risk, and about one-third were taking on too little risk, jeopardizing their ability to accumulate  enough retirement wealth.

So what does this mean for you? We’re here to help. You don’t have to be the expert. Together, we’ll work out a plan that fits your preferences and goals and your money can start to make money for your future.

Do Something Today

Follow this easy, simple plan and put your money to work.

* Within the Help group managed accounts and online advice are provided by Financial Engines Advisors L.L.C. The data for the research are drawn from 14 large 401(k) plans. All returns reported in the research are net of fees, including fund specific management and expense fees, and managed account fees. Please access the report for a full description of the methodology and data used.

 

College savings vs. my retirement savings. Where should I invest?

I just wrapped up my annual call with my financial advisor. He’s been tremendously valuable in helping me plan for my future retirement, my mom’s current retirement and my daughter’s financial future — including college!

I honestly don’t know what I would do without him.

But today, for the first time, his advice really challenged me. I’ve been lucky enough to refinance my home, so I have some “extra” money I thought I should immediately send to my daughter’s college savings account. But he stopped me in my tracks.