Aon plc · NYSE:AON
Aon — Retirement and Investment Webinar Series (September 2015)
26 slides from Aon's conference presentation, Sep 30, 2015
Slide 1: Retirement and Investment Webinar Series
Retirement and Investment Webinar Series September 30, 2015 Aon Hewitt Retirement and Investment
Slide 2: Great Expectations: Retirement Perceptions Don't Always Meet Reality
Great Expectations: Retirement Perceptions Don’t Always Meet Reality • Grace Lattyak • Rob Reiskytl • Heather Tredup Aon Hewitt Retirement and Investment
Slide 3: Agenda Tracker
Agenda Tracker Section 1 The Real Deal: 2015 Retirement Income Adequacy at Large Companies Section 2 Financial Mindset™ Study Section 3 Perception & Reality Section 4 Improving Results Section 5 Questions & Answers Aon Hewitt Retirement and Investment 3
Slide 4: The Real Deal: 2015 Retirement Income Adequacy at Large Employers
The Real Deal: 2015 Retirement Income Adequacy at Large Employers Aon Hewitt Retirement and Investment 4
Slide 5: About This Study
About This Study The Real Deal study uses real data and time-tested methodology to answer key questions about retirement adequacy: How much do workers need to retire? Are today’s workers prepared to meet their needs in retirement? When will employees be able to retire with adequate retirement
Slide 6: The Real Deal: 2015 Retirement Income Adequacy at Large Companies
The Real Deal: 2015 Retirement Income Adequacy at Large Companies Definition of retirement income adequacy in this study: Accumulating the resources required to maintain 2.1 million preretirement standard of living for a postretirement lifetime employees (in addition to Social Security benefits) Res
Slide 7: How Prepared Will Today's Workers Be For Their Retirement?
How Prepared Will Today’s Workers Be For Their Retirement? Only about 2 out of 5 workers on track for reasonably adequate retirement Distribution of Worker’s Projected Projected Age 65 Resources Resources vs. Targeted Needs vs. Targeted Private Needs Source: Aon Hewitt’s The Real Deal—2015 Retiremen
Slide 8: Financial Mindset Study
Financial Mindset™ Study Aon Hewitt Retirement and Investment 8
Slide 9: About This Study
About This Study Explores employees’ financial and savings attitudes and behaviors: – What is the current employee mindset around finances and saving? – What are employees’ most important financial priorities? Are their priorities consistent with their behavior? – In what ways do employees want he
Slide 10: Who Responded?
Who Responded? Surveyed 2,001 U.S. employees working at companies of 1,000 or more employees 35% 33% 31% < $35,000 11% Millennials 49% 51% Boomer + $35,000–$64,999 26% Millennials Boomers Gen X $65,000–$99,999 29% $100,000 or more 33% 2,001 Employees Gender Generation Household Income Manufacturing
Slide 11: What We Discovered
What We Discovered Perception May Not Reflect Reality Employees WhatDifferences do I Want really think Drive Help about my Opportunities total rewards? Aon Hewitt Retirement and Investment 11
Slide 12: What We Discovered: Financial Worries and Motivators
What We Discovered Employers Should Help: Financial Worries • Cost of health care • Saving for the future • Keeping up with the cost of living 91% Save for retirement Motivators to Save • Being financially responsible 56% • Being able to do what I want when I retire Establish an emergency fund • Bei
Slide 13: Perception & Reality
Perception & Reality Aon Hewitt Retirement and Investment 13
Slide 14: Amount Needed in Retirement
Amount Needed in Retirement Rules of thumb are available: Retire at age: 62 13.2x 1 4 in 65 11.0x have no idea how much pre-retirement 67 income they 9.6x need to replace Targets vary by person Source: Aon Hewitt’s Financial Mindset Study Source: Aon Hewitt’s The Real Deal—2015 Retirement Income Ade
Slide 15: Planning for Retirement
Planning for Retirement Actions I’ve Taken to Forecast My Retirement Income Created a financial action plan that details what I need to do in order to retire by my goal 40% Projected how much money I will need to live on when I retire 53% Compared how much I'll need in retirement to how much I'm lik
Slide 16: Amount to Contribute
Amount to Contribute How Employees Choose the Amount Annual Employer and Employee To Contribute Deferral for Age 65 Retirement 100% Retire at age: 80% 62 25% 60% 48% 40% 65 17% 29% 20% 0% 67 13% Contributed Went up to the most I felt the company Savings start at age 25 I could afford match level Sou
Slide 17: Retirement Age
Retirement Age When Employees Think They Median Age Employees Will Be Will Retire Able To Retire 63 68 Millennials Millennials 66 67 Xers Xers 68 66 Boomers Boomers Source: Aon Hewitt’s Financial Mindset Study Source: Aon Hewitt’s The Real Deal—2015 Retirement Income Adequacy at Large Companies Aon
Slide 18: Improving Results
Improving Results Aon Hewitt Retirement and Investment 18
Slide 19: Help: Design the Plan to be Easy and Automatic
Help: Design the Plan to be Easy and Automatic Plan sponsors increasingly use automatic enrollment because it helps Automatic Participation Retirement Enrollment 58% Rates Adequacy Usage 86% Impact 54% 61% At or Near Adequate 19% (versus 15% for employers without) 2005 2015 No Automatic Automatic En
Slide 20: Provide Investment Help
Provide Investment Help Resources available to help employees allocate investments have increased substantially―and it’s making a difference Investment “Help” +3.32% 90% higher median (+38%) annual returns, net of fees1 60% (+44%) 55% (+49%) 52% 16% 6% +1.0% +1x pay increase in DC Target Online Mana
Slide 21: Financial Wellness Stages Drive Solutions and Communication
Financial Wellness Stages Drive Solutions and Communication FREEDOM GROWTH Building FOUNDATION financial freedom SECURITY Financial Counseling & Education Budgeting & Financial Basics Savings & Investing Help Financial Planning Retirement Income Aon Hewitt Retirement and Investment 21
Slide 22: Meet Your Employees Where They Are
Meet Your Employees Where They Are Recognizing your people’s diverse needs and helping them take steps toward a more confident financial future Aon Hewitt Retirement and Investment 22
Slide 23: Questions and Answers
Questions and Answers Email [email protected] with questions for our speakers. Aon Hewitt Retirement and Investment 23
Slide 24: Biographies
Biographies Grace Lattyak, Retirement Practice Associate Partner Grace is an associate partner and retirement actuary with Aon Hewitt in San Francisco. Through Aon Hewitt’s Real Deal research, she consults with employers regarding retirement adequacy of their employees and ways to improve results. S
Slide 25: Contact List
Contact List Grace Lattyak Associate Partner Retirement & Investments +1.415.486.6931 [email protected] Rob Reiskytl Partner Retirement & Investments +1.952.807.0843 [email protected] Heather Tredup Partner Communication +1.224.374.3975 [email protected] Aon Hewitt Retirement
Slide 26: About Aon Hewitt
About Aon Hewitt Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance an
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