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"The new website is part of a larger
program of Extension's consumer and family economics team,"
explained Kathryn Sweedler, an Extension assistant in the Department
of Agricultural and Consumer Economics who oversees the website.
"The team has been interested in retirement planning for a number of
years."
Mary Ann Fugate, an Extension consumer
and family economics educator based in Champaign, and Karen Chan, a
consumer and family economics educator based in Chicago, are two of
several educators who have programs that address various facets of
retirement planning. The new website complements and includes
information from those programs but also reaches out to audiences
who may not have the time to attend workshops.
"While many people approach their
retirement years with sufficient savings and wealth to ensure a
secure lifestyle after their working years, many other middle-income
individuals and families have little or no savings for retirement,"
said Sweedler. "The website aims to motivate people in the 20-40 age
range to begin saving."
This concern is shared by members of
the Lauritsen Family Foundation, which funded the website's
development. The process included a needs assessment study, one part
of which was five focus groups. The needs assessment and the
development of the website's content was accomplished through the
collaborative efforts of nine Extension educators and specialists.
Paul McNamara, an Extension specialist
and assistant professor in the Department of Agricultural and
Consumer Economics, led the focus groups, which included people of
different ages and occupations. The groups were asked what they knew
about retirement planning, what they had done to prepare for it and
other related questions.
"Several things came out of these focus
groups," said McNamara. "One was that people who were saving now
wished that they had started earlier. Others felt that to be
adopted, a plan had to be simple. Many also indicated they preferred
U of I Extension as an unbiased source of information as compared to
a sales agent or company publication.
"And the Internet frequently turned up
as a source that people said they would use to get information on
saving and retirement planning."
As McNamara noted, "The focus group
research yielded immediately applicable insights for the design of a
financial education program."
On the website, users can go
step-by-step at their own pace through an information and planning
process. They can also skip around and go to sections of more
immediate interest or relevance to them.
"There is no one answer or way to go
about saving and planning for retirement," said Sweedler. "One of
the strengths of this site is that it allows people to ask the
questions they need answered and to put together their own plan."
The site has strong interactive
features, including calculators that provide opportunity for people
to put in their own financial information -- on a secure website --
and see how it performs in their anticipated retirement years.
Among the site's sections are those
explaining the impact of time and compound interest on savings, how
people can begin saving, how to target savings toward retirement,
how to choose investments, how to maintain the savings habit, and
how to set and achieve goals.
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"A number of websites with this kind of
information are just 'read it' types," said Sweedler. "We designed
this site to engage people, to give them a hands-on experience.
Hopefully, that will help them buy into the idea of saving and
planning for retirement."
There is also in-depth information on
how to make informed investment choices.
"In the past, people often didn't have
to make choices. They simply had a company retirement plan and that
took care of everything," she explained. "Today, people need to make
choices about how to manage their retirement funds."
"The ‘Choose Investments’ section of
the site takes people step by step through investment basics."
Included is an audio presentation of
Chan's program on this topic, divided into small, easy-to-absorb
segments.
Given the mobile nature of American
society and the increasing likelihood that a worker will be employed
by more than one employer during his or her working career, it is
important to know how to preserve savings through job switches.
"Many people don't understand how they
can be vested in a particular plan and sometimes may leave a job
when they only had a few months to go to be vested," said Sweedler.
"Another problem is that people sometimes cash out their plans when
they switch jobs and fail to roll the money over into a new plan.
"If you are switching jobs two or three
times in your career, these little things add up, especially if you
don't roll over the money into a new plan."
Underlying the saving and planning
process is the need to develop and set realistic goals.
"We take people through steps that help
them think about what is important for their retirement, what kind
of income they need, what kind of a lifestyle they want," said
Sweedler. "People need to set goals for retirement and then take
steps to make sure those goals are realized."
Again, there is a strong interactive
component that allows people to plug in their own data and see how
it works out over a few decades.
"This can be an eye-opening experience
for people," said Sweedler. "On this particular calculation chart,
you put in current monthly expenses and income. The bottom line is a
net cash flow figure. You really see where your money is going."
Information on developing individual
plans of action to achieve saving and retirement goals allows users
to tailor their particular circumstances and plans.
"There is no 'right' answer for
everyone. The answer is different for everyone," said Sweedler. "The
interactive features of this site allow people to find their
particular answer."
Sweedler added that the site is
designed for return use.
"We think it
will be helpful if people can go to it once a year or so after they
make their initial plans," she said. "With the information
available, they can compare the performance of their strategy
compared to their goals."
[University of Illinois news
release]
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