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CFPB FinEx Webinar: Retirement
December 10, 2015
1:00pm CT

Welcome and thank you for standing by. All participants will be on listen-only mode until the question and answer session of today’s conference. At that time if you wish to ask a question you may do so by pressing star followed by the number one. This conference is also being recorded. If you have any objections you may disconnect at this time. I will now turn the conference over to (Irene Skricki). Thank you and please begin.

(Irene Skricki:	Great, thank you very much, and thanks, everyone, for joining our CFPB Financial Education Exchange Webinar for December. I’m very happy to be joined by a couple folks from the office of older Americans here at the bureau who’ll be talking about some new retirement related tools that we just released recently. So the first thing we always do for those of you who have been on these calls before, first we have our disclaimer of course.

	This is not legal or other guidance for folks, but we always say a few words about (FinEx) to make sure people know what we do. The CFPB as most of you know I think has several functions to try to make the consumer financial marketplace work better, educating consumers, enforcing and supervising against financial service providers and also studying both the markets as well as consumer decision-making so we can help perform those functions.

	And then within the consumer facing side of the bureau, the - there are six offices including office of financial education, which is the unit that has been managing the financial education exchange but we work closely with our sister offices including the office for older Americans who has joined us here today. 

	So I always note on every call that this is part of the financial education exchange which is a kind of vehicle for us to get our tools and resources out to financial educators for all of you to tell us back what you’re learning about the financial education field in your own work and a way hopefully to also connect with each other.

	And so we do regular newsletters, regular Webinars, have a discussion group and some other regional meetings in some cases and some new things coming up for 2016. And I probably all of you already signed up, but in case you have any questions or want to encourage additional folks to sign up the email address that you probably all have memorized by now is cfpb_finex@cfpb.gov.

	Quick promo for our next Webinar which will be going back to the four Thursdays, which we usually do except for months with late month holidays, will be a very exciting Webinar on measuring financial wellbeing. Some of you may remember that our very first Webinar when Finnex kicked off back in May was on a new report by - new at the time, report by the bureau on financial wellbeing, how to define it and - for consumers.

	And we have, as promised at the time, there is now a scale that - or a measurement tool to help you measure financial wellbeing. It will be released I believe tomorrow and we will have a Webinar on it on January 28th, so again feel free to sign up for that in the Finnex inbox. Also as always we have our resource inventory that lists all of the new tools, all of the tools and resources. We have an update to that coming out very shortly with things that have come out since May.

	And again you can see this on the Web site for Finnex with the URL of consumerfinance.gov/adult-financial-education. Not the catchiest URL, but that will get you there to see this inventory. And then lastly I always want to remind people to sign up for the LinkedIn discussion group that we run, a way to both see the newest bureau tools, but also for you to put your own things up, your own reports so we have a number of posts from other organizations.

	And I encourage all of you to join that group if you haven’t already, and if you are in the group please feel free to post things, post ideas or comments and that’s a good way to reach other financial educators. So with that, I am very excited again about our presentation for today. Before we launch into that I just want to remind people we’ll do the usual thing we’ve done on these calls which is that we’ll ask you to hold questions until the end of the presentation unless you have sort of a clarifying question or something that’s I guess urgent.

	In which case for those of you who’ve been able to get into the Webinar portion, there is a little Q&A tab at the top of the screen you can type that in. I will be watching that and if it’s something that you know, we want to stop the speakers, I can do that and ask them. Otherwise at the end the operator will open up your lines and you can ask questions verbally.

	And then my last statement is - my last comment again is many of you know as well that due to all kinds of assorted software upgrades, it gets harder and harder to get into this system every month. So if any of you are on the audio portion and have not been able to get into the Webinar portion, send an email to cfpb_finnex@cfpb.gov. There is another person monitoring that inbox right now and will send you the power point deck if you are not able to see it and then you can follow along.

	So we are looking for a technical solution to this problem, but for this month at least we can get you the power point. And with that I will turn it over to my colleagues from the office for older Americans, (Hector Ortiz) and (James Minor). I’m very glad to be joined by them, and (Hector), I think you’re going to start, right?

(Hector Ortiz):	Yes, thank you, (Irene). Good afternoon, everyone. Thank you again for the invitation and the opportunity to share with you our new resource from the CFPB and the office for older Americans. My name is (Hector Ortiz) and I am with the CFPB office for older Americans. Sooner or later most of your clients and you will have the opportunity for to move from your working lives into your retirement life.

	And one important decision that most of us will have to make is when to claim social security retirement benefits. At the consumer financial protection bureau, we provide resources to help consumers make informed financial decisions for themselves and their families who we specifically in our office for older Americans want to help consumers make sound financial decisions as they age.

	Deciding when to start claiming social security payments is critical, because it affects both the monthly amount that someone receives as well as the total amount of benefits that a person receives over the lifetime. Okay, next. About two or three beneficiaries 65 and older rely on social security for more than half of their retirement income, yet despite how important these benefits are, we also know that many people claim with limited or incorrect information.

	I want to share with you today how the CFPB is working to narrow this knowledge gap. We want to make sure that consumers have access to accurate information about their monthly and lifetime benefits when they claim at, before, or after what social security has designated as their full retirement age. We also want consumers to understand the life factors that affect their decision, including their marital status, how long they plan to work, their likely expenses in retirement, other expected sources of income, and their life expectancy.

	Everyone deserves to have financial wellbeing in their later years and at the CFPB we want consumers to take control of their financial lives. Next - should be...

(Hector Ortiz):	This is the screenshot. This is actually a life cycling now. This is the CFPB US online resource. If you are familiar with some of our other resources which include owning your home and paying for college, this new resource focuses on retirement, planning for retirement is our new tool that allows consumers to estimate how much money they will receive for their circumstances and how much - and would show their tradeoffs at different claiming ages.

	We started with the latest research to clarify what people need to know in order to make the best choice for themselves and their families about claiming social security. We also tested the tools thoroughly with consumers to make sure that it is approachable and easy to use. The first thing we asked consumers and you are going to see this through the tool I know when you have the opportunity to access it yourself and with your clients, is that what we ask are very limited areas of our - post very limited barriers of entry.

	And that is we only ask for date of birth and the highest annual income. Next, okay. For example, we’re on slide 6, for anyone following along at home. If - let’s say - let’s use a hypothetical average consumer who turns 50 in 2015. That is someone born today, December in this case we have the example November 12 of 1965. This person’s median income was $32,140. This is the median income for the - for those 25 and over.

	And it makes, again, so you are using the tool, may take a couple seconds to load, but if you - you will see some details once you press on the get your estimate. Let’s use the example. This is - for simplicity this is (Lisa) which is the most common girl’s name in 2014 with (Emma) but in 2065 was (Lisa) so we’re going to talk about (Lisa).


(Hector Ortiz):	65, (Lisa), this is the person that we are describing here, this is the first thing (Lisa) will see when they get their estimate, and based on her date of birth and income her full retirement age based on social security is 67. This is the age at which they are entitled to a full benefit according to the formula. And that benefit will be $1268. Again that’s based on the highest income of $32,140.

	If you scroll through the last on the graph let’s you see if the different options for claiming and if you go to the right also on the other options for claiming, and you will see how the benefit increases and decreases based on the claiming age.

(Irene Skricki):	So again the salary people enter is - you said it was the median, but if they put in their own salary...

(Irene Skricki):	So this is the benefit they would get.

(Hector Ortiz):	For the example that we’re using here again is the (Lisa) which is a common name in 1965, someone turning 50 and we’re also looking at the - what will be the median for that person. Next slide, and so here’s an example for you get when the person moves the cursor all the way into age 62, when you slide down to her claiming age at the earliest possible option, we see that if she claims at 62 her monthly benefits can be 898, and her lifetime benefits by age 85 which is the average life expectancy.

	So someone who reaches age 62 will be - could total 247 - $248,000. Similarly if you slide all the way to age 70, if (Lisa) waits to claim up to the maximum age of 70, her monthly benefits can be applied as $1600, $1572, and that is a total of $282 - $283,000 by age 85, which is again the average life expectancy of someone who reaches age 62. We’re now on slide 10.

	So we know that the numbers matter for people making this decision, not only what they will get on a lifetime but also on a monthly basis. That is what their budgets are based on, but social security have little more complexities than any other program. The complexity of this is that it involves other components of your retirement plan. So we know that for many people the decision about when to claim social security is about more than just the numbers.

	And so we provide tips related to this specific factor set you see in this step #2. In each question here allows someone like (Lisa) to reflect on her own situation. Next.

(Irene Skricki):	And (Hector), I just - there’s been one question that’s come in over email, someone asking how do we get to the tool? I guess we can either follow now or access this later, so you want to let us know that?

(Hector Ortiz):	Yes, definitely. This is something that you want to do, as we are doing this, it will be consumerfinance.gov/retirement.

(Irene Skricki):	Right, and actually if you just go to consumerfinance.gov, I think if you...

(Irene Skricki):	It’s on the front of the home page now, right? A link to it because it’s our newest tool, so it is available. It’s live. It’s been live for...

(Hector Ortiz):	And you can - exactly, you can do it with your own information. And so...

(Irene Skricki):	And so all of you can start planning for your retirement as you listen to this call.


(Hector Ortiz):	And so next slide, and so as you go through this, step number two - sorry - and you click on each one of the answers to those questions, I think it’s still on there.

(Irene Skricki):	It is, and I’m trying to get it off of that. Sorry, folks, we’re trying to move the slide ahead here from 10 to 11.

(Hector Ortiz):	Okay, here we go, and so as you open each one of those and search you will find tips again whether chief married for instance (unintelligible) and as we answer this question, you will receive personalized information on her situation. She can read this - about these topics in detail or just get her top line summary. When we built this tool we conducted again a lot of consumer testing and user - for user friendliness.

	And we all know that one of the challenging of engaging use service is often the length of the content, so what we tried to again these simple but also as effective as possible in each one of those answers, you also see - next - you will see also questions related to the expenses in retirement, also questions about other sources of saving and whether the individual expecting social security to be the only source of income.

	And lastly this question that for many is funny and in many ways the way it goes, but it really deals with this issue of longevity which many consumers struggle to think about visualizing themselves so long into the future, but this question about living a long life, again, an important consideration when claiming social security. Slide - we know that consumers will read and will get this information but what will make this actionable is to help them move from this knowledge into action.

	And that has in fact been our approach to many of our tools. And we know that many people have already a preformed idea of when they will retire, whether that’s based on what they know or their conventional wisdom, and in this step what we are asking people is to choose an age here and this serves as what we call a precommitment device, a way to remind people a choice that they have affirmatively made and will stick with then.

	Again we clarify that this will not start an application or will affect their benefits. Next slide, and after they choose this we make again a last call for whether they’re taking a full benefit or a decreased benefit, but we also provide very simple three steps that we consider to be important and critical in making this decision. One of it is opening a my social security account with the social security administration.

	Which by the way was a partner in developing this tool, and second considering other forms of retirement savings and lastly coming back to this tool if anything changes from whether it’s their marital status, their work status, or whether their plans for retirement and income have changed. This again, we see that this tests are simple, what we learned in the research is people do take them.

	And it’s again a very effective icebreaker for many consumers to engage in. I’ll make a brief stop here. My colleague (James Minor) from my office of older Americans, our office of older Americans, will be talking to you about a new resource that is listed in our tools and it’s offered an opportunity for those who want to save outside of social security.

(Irene Skricki):	All right, and before you do that, can I just say something just to help (Finnex) educators think about how to use this? So it’d be useful to actually sit down with a financial educator - I’m sorry, with a client and help them walk through it, and in particular to help them think about when to retire, because the message in some way is you’ll get more if you wait, right?

(Hector Ortiz):	Yes, and then so a lot of these questions are definitely meant to be also forces of conversation too. Why does marital status matter for making this decision and a lot of what we learn at least from the testing is that individuals not only were interested in learning more, but they were interested in having a conversation with their family, with their spouses.

(Irene SKricki):	Right.

(Hector Ortiz):	It’s saying to them, oh, I just learned that the decision, you cannot make it alone. We have to make it as a household. And so that was part of the consideration, and after (James) sort of talks a little bit more about this new resource available from treasury I will go back to talk about other details about the tool. All right.

(Irene Skricki):	Great, thank you.

(James Minor):	Great, thank you, (Hector) and (Irene). For those following along at home, there is not a slide number but this will be slide 16 I believe. We just left (unintelligible), and I’m really grateful to have a chance to talk a little bit about this exciting new retirement account, and this is really the perfect segue as (Hector) is just discussing other forms of retirement savings.

	And you know, as you are working with your clients and as clients have conversations with their family about the ideal time that’s right for them to claim social security, they may find after looking at the retirement tool that (Hector) just walked us through that indeed it’s in their best interest to wait a little longer than they had originally anticipated or that they had originally planned for.

	And so you may have some clients that are looking at a couple of extra years to build toward their ultimate retirement savings plan. So that’s where something like My RA comes in, because saving is essential throughout our working lives, and increasingly important as we approach retirement, but as many of you know, a lot of working Americans don’t have access to a traditional retirement savings plan through their employer.

	That’s why we’re so happy to see the release of the My RA retirement account from the US department of treasury. For workers that haven’t started saving for retirement, a My RA account is an ideal first step. But we think workers of all ages will find this simple, safe, and affordable savings account a great way to add to their retirement security while they’re working toward their original claim age or while they’re waiting a little bit longer to claim social security.

	so how does a My RA account work? Well, it’s a very simple process. You have your client or your family member or you - or yourself go on over to myra.gov and it’s a very simple process to sign up. And from there you can begin to fund your retirement savings account with your checking or savings account through your bank or your paycheck, and an important detail is that at tax time savers can also send some or even all of their tax refund into their My RA account.

	And basically that’s it. You start saving from there and as you know from working with your clients and for most of us across the board beginning to save is usually the hardest part. Once we clear the initial hurdle, we can start working towards our savings goals, and that’s one of the nice features of this My RA retirement account is that it’s so simple to use and to get started with.

	So if you’ll go to the next slide, I’ll give you just a couple more reasons why this is a really great option for workers of all age who don’t have access to a traditional retirement savings account. For one thing, it’s free to open, no hassle, no fees or charges or complicated terms to digest. Savers are free to contribute any amount they want and change it as they go. So according to their budget if $2 is what’s comfortable, they can start with $2. They can move up to $20 or they could begin with something like $200.

	It’s very flexible. Another thing is that it’s so safe to start saving with a My RA account. You actually have no risk of losing your money, and that’s a really great feature for first time savers. And by that same token if an emergency strikes, savers can access their money without losing any of it to fees. So we encourage you to go check out myra.gov. Spread the word with your clients, and I will turn it back over to (Hector) for some additional details about the retirement plan.

(Irene Skricki):	So can I just ask a question?

(James Minor):	Yes, please.

(Irene Skricki):	So this is - I just want to emphasize, this is actually a remarkable thing. I don’t know how much people have really heard about it but the treasury department has essentially set up a retirement savings structure loosely speaking for people who may or may not be getting it through work, and that’s actually pretty cool, and a real opportunity especially for any of your clients maybe who don’t have an employer sponsored plan. Just a note, though, so these are basically state - they’re not investments, they’re getting sort of savings type interests?

(James Minor):	That’s right. You - I mean, it’s an investment in the sense that your contributions do earn interest, but they’re backed by the full faith and security of the US treasuries, and that’s why you can’t lose your money. There as good as the US government, but yes, exactly to (Irene)’s point, they are filling the gap between you know, workers who would like to save but don’t have access to those kinds of retirement benefit plans at work, and this makes it as easy as visiting the Web site and signing right up.

(Irene Skricki):	And - but if the interest - it’s not - you’re probably getting - interest rates would be more similar to a typical savings account than to an investment account because of the...

(James Minor):	Right, right.

(Irene Strachey):	You’re paying for the lower risk basically.

(James Minor):	That’s right, and that’s an important distinction. This My RA account is not intended to compete with private market accounts that perhaps have more aggressive investments and carry risk. You know, this is for the beginning saver who needs an introduction to you know, the retirement savings account world. And then as they, you know, save up and get their confidence and maybe learn a little bit more about it, they can sort of graduate if you will into a private retirement account down the road.

(Irene Skricki):	And then one last question, are these like traditional IRAs, are they tax preferred?

(James Minor):	These are built on the Roth IRA tax structure.

(Irene Skricki):	Okay, can you tell people what that is, in case people aren’t...?

(James Minor):	Sure thing. So when you pull - when you access your money down the road, it is not taxed at the time of accessing it.

(Irene Skricki):	Which means it is taxed now.

(James Minor):	You’re putting in post-tax money. That’s right.

(Irene Skricki):	This is post-tax money. Okay. Great. That’s...

(James Minor):	Post-tax now and untaxed down the road.

(Irene Skricki):	Which is one reason why there’s no withdrawal penalty I assume because you didn’t get a tax benefit to begin with?

(James Minor):	Well you know, there are some that even have withdrawal penalties with the same structure, so this is unique in that sense.

(Irene Skricki):	Okay, great. Thank you for that.

(James Minor):	Right. You bet, and thanks for the clarifying question.

(Irene Skricki):	All right, now back to (Hector).

(Hector Ortiz):	Yes, so we know that Spanish speakers across the country also experience some of the knowledge gaps that we discussed earlier, are also in need of similar tools, so we also created a tool for this segment of the population. It can be found at consumerfinance.gov/juvelacion, and that we’re happy to share the link for all of you.

	We know that the census projects that this year about 9% of the population that will turn 62 will be of Hispanic origin, but by 2050, that will grow from 9% to nearly 22%. So this is a growing opportunity and probably a larger segment of your clientele. And understanding both the importance of both the growing population and the value of mobile usage across all languages, we optimized this Web site for mobile devices.

	So - and they’re experiencing the desktop is somewhat different than a tablet and a phone, but definitely accessible in both, and we again if that is the way you provide counseling, the way you interact with consumers and it is to be an assignment to them, again an easy way to get them engaged in this topic. What we expect to do as a view of the phone conversion of it and next is slide 18, so you know, through planning for retirement what we’re doing here is really helping people avoid surprises and consider their financial being in their later years.

	And some of our user feedback sessions what we found is that people left with plans to talk to their spouses, consider their savings accounts, and they felt more informed about their options. They learned things like their social security record was based on 35 years of earnings, not on the last five, not on just purely you know, having 10 years or what they keep hearing about the 40 quarters, and we were - those are important pieces.

	But the record tells us based on 35 so that was an important piece for them to know. We were excited for the general public to have this experience too, and by using planning for retirement consumers will not only have trusted information but they also will have an unbiased source of information for themselves and then their families.

	Many of you who are going out there talking about this topic and the importance of social security whether it is in 101 counseling sessions, workshops, or thinking about curriculum, we encourage you to consider adding this tool and other tools that we have here at the CFPB. We - when we release this tool we also created some ask CFPB on this topic and CFPB is our - is a resource in our Web site that answers - or provides answers to common questions from consumers.

	And we have a set that relate to social security benefits and in addition to this we have created promotional materials so that if you want to put in your offices we’re happy to send those to you. This here is our email. Please contact us if you’re interested in promoting or using this tool. We want to hear your feedback. And that will be all, thanks.

(Irene Skricki):	And just for anyone who doesn’t - isn’t looking at the slides, that email is cfpb_olderamericans@cfpb.gov. So great, thank you very much, (Hector) and (James). So what we’re going to do now is take some questions, so again you can either send them in, in the Q&A box for those on the Webinar. I will continue to watch that, and also operator, can you now give instructions on how to ask voice questions?

Coordinator:	Yes, thank you. At this time if you wish to ask a question, please ensure your phone is unmuted, press star followed by the number one and record your name when prompted. Again that is star followed by the number one to ask a question over the phone lines. Those questions will take just one moment to queue up. Please stand by.

(Irene Skricki):	Great, so star one for questions, and in the meantime (Hector), I will ask a question, which is I know there were - there’s sort of tradeoffs between how much data on which to base these estimates wanting to not ask too much from people but enough that it’s customized. So my understanding is people are putting in their highest income or the correct number there, but if they want fuller information they can go to the my account, my social security account, right?

	So this gives kind of people a snapshot, but it’s not a completely - a complete estimate in the sense that not all the data is there. It’s sort of a snapshot based on limited data. People can get more if they want, but at least it’s in the ballpark of what the actual social security benefits would be.

(Hector Ortiz):	Yes, so we do base our estimate of current formula from SSA and in fact what we do is we run this in their quick calculator, so we - you enter data but you’re really entering in social security’s Web site. It’s a way that we are collaborating here, but it’s still an estimate that is not based on the earnings record, so previous earnings are assumed, are estimated using the number that you enter here.

	This is a rough estimate as (Irene) said. It turns out that it’s very similar to the one that you will get even with more precise tools for the younger population. It is the further, closer you are to retirement, so someone who’s age 52 who uses this tool for instance may have sort of a bigger difference between our estimate and what they will see at social security because social security will actually at this point have 30 years of record versus...

(Hector Ortiz):	The younger person still the assumption remains the same which is that based on the number that they entered to us, there’s still a projection to the future we’re both making, social security and us, the same assumptions.

(Irene Skricki):	So it is something that - so just following up on that, you could use for a - you could use with a younger person earlier in their kind of working life to say hey, thinking ahead of how much you might want to save or trying to better understand how all of your current choices affect the future, this could give you at least a ballpark of what social security would mean for you, and that you could then use as a planning tool obviously for someone closer to retirement.

	You would - they’d be using it for much more like wow, this is in a couple years, and they should also then definitely go to social security to get the more - the fuller estimate based on the full earnings record.

(Hector Ortiz):	And I think it is always is one for the low income population, how important those benefits will be to them, and yet that the cost by different claiming ages mean a lot, and then for the higher income populations it tends to be more the issue that social security doesn’t replace their entire earnings, so that there is a replacement rate, and so they hear some of the things that we hear.

(Irene Skricki):	Right. Okay, and then actually we have - we now have two email questions and then I’ll turn back to the phone in just a minute. Again star one for those who want to get in the line for verbal questions. Actually someone actually emailed me on my blackberry, which is interesting. The question is about My RA which is does this work for a non-working spouse like other IRAs do? How does it impact a non-working spouse?

(Hector Ortiz):	At this time you do need to be employed. I would refer anybody outside of a traditional employment setup right now to go to MyRA.gov and learn more about the product, but at this time yes, you need to go through your employer to set that up. So it wouldn’t be appropriate for that person at this time. Yes.

(Irene Skricki):	Okay, one other question before you turn to this, just can you do automated deposits into the My RA through the Web site?

(Hector Ortiz):	Yes, yes.

(Irene Skricki):	Okay, great. All right, one more - one I’m going to read and then we’ll check for phone. There’s a question here saying that we got the file on suspend strategy that allows us to use the higher benefit of the other spouse to file under has been eliminated in 2015. Is that part of your tool?

(Hector Ortiz):	So individuals can still use that strategy up to the middle of May of 2016, but we are not including this filing suspend and other claiming strategies in our tool. The reason for this is what we know is that the majority of the people are claiming immediately at age 62 or even before their full retirement age, and so the segment of the population that can even use some of this more complex strategies is somewhat limited.

	The one strategy that we do talk about in our tool is one that a lot of couples could benefit of, and unfortunately many people are not necessarily considering it, which is if you are the higher earner in the household, you should be the one considering claiming at your full retirement age or later in order to ensure that the surviving spouse receives the highest possible benefit.

	We do have one claiming strategy that does remain valid, even past May of 2016, and that is the strategy for widows where they have the opportunity to claim one benefit first and let the other one grow, and that is spelled out in our tool. The idea of the tool was to also get them talking to a more - a financial planner or social security about this strategy as well as some of the content that appears in our tool.

(Irene Skricki):	Right, so there’s in addition to the things on the screen for some of the specific situations, if you clicked on those there would be more detail.

(Hector Ortiz):	Details and some tips and exactly and spouse, if you say yes you’re married, you’re going to see the highest earning tip, and if you say yes to widow you will see the tip around widows and how to consider the two benefits.

(Irene Skricki):	Right. I want to make one note before I promise we turn to the phone, which is that another resource the office of older Americans has, (Hector) just mentioned you know, potentially this may lead you to think about a financial advisor to help you think through retirement is there is a know your financial advisor tip sheet to help people understand how to find a financial advisor that is actually in their - sort of in their best interest. (James), do you want to say a word about that since you were the person on how that works?

(James Minor):	Sure, yes. So one of the common areas of confusion we find when people are shopping around for professional financial advice is that the find the landscape is just very difficult to figure out, it’s very difficult to decipher who does what, what kind of service they’re offering, and especially if they make the claim that the specialize in the needs of older consumers, then it gets even more difficult to determine just who has what kinds of expertise.

	So our plain language consumer guide know your financial advisor presents consumers and anybody that’s helping with this discussion with a consumer walk through five important questions. And I won’t lay out each question right now, but I’ll just tell you that they’re designed to help you understand the kind of services that a potential advisor is offering. They help you determine how the advisor is paid to see if that structure works well for you.

	And they encourage you to investigate the background and the credentials of the advisor to make sure that first of all the advisor has the expertise that he or she claims and second of all to see if there is a history of complaints that would give you pause for working with this person. So it’s practical advice and it’s laid out in a simple way that can help make a complicated landscape look a lot simpler in a reasonable amount of time.

(Irene Skricki):	Right, and if anyone’s looking for that of course it’s on our Web site. You can get to it in a number of ways, but I always urge people to go to the resource inventory, that nice booklet that I showed a screenshot of which does have that tool and others from the office of older Americans. You can also get to it through the older Americans subpage on consumerfinance.gov if you want to see that information about advisors. Okay, operator, do we have any phone questions?

Coordinator:	We do. Our first question will come from (Vivian Gentry). Your line is open.

(Vivian Gentry):	Actually that was my question that came in about the spousal IRA. I wasn’t for sure that it would get there so I had called in, but that was my question.

(Hector Ortiz):	Okay, thank you.

(James Minor):	Yes, I would go to MyRA.gov to you know, always look through their content at all times. You know, it’s not our product, we’re just big fans of it, and you’ll get all the up to date information there.

Coordinator:	And we’ll next take a question from (Lou). Your line is open. (Lous Sevolka), I believe, your line is open.

(Lou Sevolka):	Hello?

Coordinator:	(Lou), we can hear you.

(Lou Sevolka):	Oh, do you hear me? Okay, I’m sorry. So I had a question regarding the tool itself. I was working with it the other day and I put my information in and it’s kind of neat, but the question surrounds more of income itself as far as what you see on my social security, so when you into that Web site you can see all the income you made from the time you started making income.

	It’ll be kind of neat to put all that into your tool to see exactly what the benefits might be in the future so it gives you a good allocation of what you’re to expect. And then what you might have to make in the future in order to maintain that particular benefit in the future, so just a thought.

(Hector Ortiz):	No, no, very, very appreciated and in fact what we will continue working with SSA and exploring the opportunity. As you know one of the features that SSA is trying to work right now is to make their My Social Security accounts a little bit more interactive so that individuals can transfer some of those 40, 30 years of earnings that they may have into a tool and planners had asked for that for a long time.

	I will tell you that one of the challenges that all - most tools have had on the social security space has been that they have requested people to enter those 35 years and that really has been a big barrier.


(Hector Ortiz):	Yes, so they have to go and find those numbers, which for a lot of people are - it’s challenging, but one of the things that we want consumers to do is certainly not only enter what they think is what right now is their highest but what they could think could be their highest at some point, and so they can play with scenarios, so what we saw in this tool that was less possible than others was this ability of people just playing around with numbers. But I appreciate the comment and certainly we will continue working with social security and we will see where ideas like this will take sort of initiative or flight.

(Irene Skricki):	I mean, one aspect of our tool if I may kind of speculate is that we don’t - it doesn’t retain any data. Yes, this is - it’s not - you don’t have an account, it doesn’t - you kind of type in that number and you get this kind of quick feedback and then you’re encouraged for fuller data to go to SSA.

	You’re saying that may evolve over time, but certainly at this point it’s a low entry barrier - closed barrier to entry and also nothing is retained so people don’t have to worry about anything kind of personal being left there. Let me just - let me check for phone questions. We have another email one as well. Operator, are there more phone questions?

Coordinator:	Yes, we do have additional questions in queue. Next we’ll hear from (Paula Mucci). Your line is open.

(Paula Mucci):	Thank you. Hello. I had wanted to know about the My RA please. Are there any - how many times would they be able to withdraw if they needed to in a year? Are there any restrictions? Thank you.

(James Minor):	There - sure. Thank you for the question. There are no restrictions that I’m aware of.

(Irene Skricki):	So you can withdraw - I mean, so you could use it sort of as an out account.

(James Minor):	Yes, as far as I know you can contribute and withdraw as needed. You know, I’m not sure the exact turnaround time, you know, between trying to access your money and when you have it. You know, I don’t think it’s going to be you know, any significant amount of time, but I’m not aware of any set number of restrictions.

(Irene Skricki):	Good question, thank you. Are there other phone questions, operator?

Coordinator:	Yes, we do have four questions left in queue. Up next we’ll hear from (Julia Mull). Your line is open.

(Julia Mull):	Thank you. Excuse me. So also on the My RA, are there - I’m assuming that all it asks would be earned income because of the answer with the spousal, but also are there limits on how much like yearly contribution limits, and is there a - since it’s more like a Roth, can people continue to contribute to it after 70 ½?

(James Minor):	Right, so it does follow the Roth structure. I will have to double check on the 70 ½ question but I can tell you that the cumulative threshold is 15,000. And at that point you’ve reached the limit on the My RA and you would be looking at transferring your savings to a private market retirement account at that point.

(Irene Skricki):	Great, okay. Next phone question?

Coordinator:	The next question comes from (Scott Reuben). Your line is open.

(Scott Reuben):	Hey, this question is for (James), and (Paula) kind of answered - you kind of answered when (Paula) asked the question in regards to the amount of withdrawals, but I did have one question. Are they - are the people able to take their current savings account that might be earning half a percent and transfer it over to a My RA account?

(James Minor):	Well, yes, you can fund your My RA account through your savings account. That’s right.

(Scott Reuben):	Okay.

(James Minor):	You know, we’re talking - this is intended to save towards retirement, so you know, if you had a large savings account that would you know, automatically you know, put you past that threshold of $15,000, then that would be a different story, but yes. You can certainly fund your My RA account through your savings.

(Irene Skricki):	And I just - because you said to think about moving money, is - what - do you know anything about the interest rate? Is it comparable to another savings account? Is it variable?

(James Minor):	It’s higher.

(Irene Skricki):	Is it higher? Right, is it higher, of course.

(James Minor):	Right, so it’s tied to the current US treasury rate, so I wouldn’t be able to quote it, but you know, it’s associated with the safety that you referred to before, right? You can put it that way.

(Irene Skricki):	Interesting. I mean it’s interesting the questions about whether you can do multiple withdrawals and what the interest rate is makes you wonder if this - I mean, people could in theory use this as a transaction account - not a transaction but like a regular savings account because it isn’t restricted to retirement uses. I mean, it’s labeled as a retirement account which is great for people...

(James Minor):	Yes.

(Irene Skricki):	Mentally thinking this is my retirement money.

(James Minor):	Yes.

(Irene Skricki):	But it’s not an immediate barrier to someone who lacks another type of savings account from using this.

(James Minor):	Yes, so exactly, this ability to take out money as you need it I think is one of the appeals, particularly for you know, low and moderate income workers who don’t want to feel that you know, they’re going to be penalized or somehow hampered down the road or restricted by you know, their new found savings practice. However, you know, it is intended to be a stepping stone to greater retirement security.

	So it is a retirement account after all. It’s just a very flexible and safe one, you know? So we would encourage people to use it as a retirement savings, but you know, as we know financial shocks come and it’s great to know that you have access if you need it.

(Irene Skricki):	Right, right, and actually having a low barrier savings account for any purpose is a good thing. Clearly this is meant to be your retirement account but all right, and quickly I’m just going to address one question about someone who did not get into the tech issue. We have recorded this so that it will be on the Finnex Web page, that adult-financial-education site in a few weeks, so you should be able to listen to it and watch it if you were not able to see the slides today. Other phone questions, operator? There’s still a couple more, I think?

Coordinator:	Yes, we still have three questions in queue. The next question will come from (Alicia Townsend). Your line is open.

(Alicia Townsend):	Hi, again. My question was actually already answered. It was about how much you can put into the IRA account before they begin to cap it, so that was actually already answered. Thank you.

Coordinator:	And we’ll take a question from (Adrian Hanes). Your line is open.

(Adrian Hanes):	Yes, I don’t have access to the slides, so I apologize in advance if you’ve already shown this, but you said this is for older adults, so is that - does that mean that no one younger than 62 can actually start their IRA through MyIRA.gov just to use it as a tool for planning?

(James Minor):	Oh, absolutely not, no, and I’m sorry for any confusion that may have come. You know, we are the office for older adults, and you know, a retirement account, you know, you associate that with being older, but absolutely a My RA starts - start young and contribute early and often and build your retirement security as young as possible. Yes, yes.

(Adrian Hanes):	Okay.

(James Minor):	Thank you for that question to help clear that up.

(Hector Ortiz):	And similarly this tool that we have created, even though the mandate of our office is to focus on those 62 and older, it really - the prime target is those in their late 40s, early 50s. They are starting to think about these decisions and sort of planning ahead on some of the key retirement decisions, particularly when to stop working.

(Irene Skricki):	Great. Was there another phone question, operator?

Coordinator:	We have one additional phone question. It’s going to come from (Cliff Hoppman). Your line is open.

(Cliff Hoppman):	Good afternoon. I just - I think people might be coming to the conclusion I am, which is what would prevent me as a consumer from using the MyRA account as a basically super money market account to get a better interest rate than what I can get in a money market account which is currently about 1%, whereas this program probably is going to yield somewhere in the 2 ¼ to 2 ½% range?

(James Minor):	Well, I don’t think that there is anything preventing you know, any consumer from taking advantage of whatever interest rate is available through their My RA account, you know? It has a relatively modest cap on it, so I think that would limit, you know, the ability for somebody to maybe you know, use it outside of its traditional intention. But you know, it’s a savings account and it’s going to earn the interest that’s available. So if you qualify according to the Roth rules, then it’s available to you.

(Irene Skricki):	All right, we have one more emailed question that I will read and then I think we will wind up but - go ahead, all right. Do you want to...?

(Hector Ortiz):	Yes, I - we got a question specifically from (Elaine) that deals with the issue of widows and whether first of all there has been a change in the policy that widows can claim on their former spouse, deceased spouse’s record, and whether there is an also limit and if that’s still the case, if there’s the limit of how much they can make. And I’m not sure if by make it means like how much benefit they will get or actually earnings.

	This is a question, (Elaine), that I will have to check with social security administration. We have worked closely with them. The - my understanding or our understanding in general is that those also - the widows benefits were not affected by all of the recent changes, but if this question again we will need to clarify if you mean earnings in this case, and if you do mean earnings, then there may be other implications in this question.

	But it’s again our understanding is that the widows benefits in particular were not affected under this - the recent changes to social security claiming strategies.

(James Minor):	And this is (James) again. I realize I may have left out one detail about the limits for My RA contributions. I mentioned the $15,000 total cap, but I think one of the questions also asked about annual contribution limits, and the annual limit is $5500 per year for individuals under 50, and for those older - 50 years or older, it’s $6500.

(Irene Skricki):	So, yes, great. Okay, well thank you, everyone. We are one minute from the top of the hour, so I think we are right on time here, so thank you very much. It was really interesting information. I hope this is a tool that people can use with their clients, both the planning for retirement tool from the bureau as well as treasury’s My RA account.

	So I appreciate both of you talking about that and thank you to everyone who participated. Again this will - Webinar will be posted in a few weeks. And again, all of the tools we talked about today that particularly (Hector) talked about are on our Web site, available, usable now. We encourage everyone to start trying them out. So thank you very much.

(Hector Ortiz):	Thank you, everyone.

(Irene Skricki):	For your patience.

(James Minor):	Thank you.

Coordinator:	And with that we’ll conclude today’s conference. Thank you for your participation. You may disconnect your lines at this time.


END