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[JAN. 24, 2004]  URBANA -- The goal of a new University of Illinois Extension website is to make saving and planning for retirement easier. The site also assists individuals in making informed investment decisions. "Plan Well, Retire Well" is at http://www.retirewell.uiuc.edu/.

"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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