By RUSSELL VANNOZZI
Trina Gross knows a thing or two about planning for retirement.
A 27-year veteran of Acuff & Associates, the Brentwood resident is well-versed in pensions, 401(k) plans and stock-ownership plans. If it involves retirement, Gross is on the case.
So does she think America is hitting a retirement crisis, as has been claimed by some major media outlets?
“I don’t know if I’d call it a crisis, but I’d say it’s an area that Americans need to pay attention to,” Gross said. “We’re always a little concerned about the Social Security system and how that’s going to stack up as the years go on. While I think we have a wonderful system in place, it’s an individual’s responsibility to save for their retirement.”
From early founder to President-Elect of NIPA
Lucian Acuff and four other partners founded Acuff & Associates in 1991. Gross was one of the original employees, and she moved up the company’s ladder in the years that followed. In fact, she is now a part-owner of the company and serves as its CEO and Principal.
“My job is to see that everything runs properly, and that all our client services are delivered,” Gross said. “I also maintain a lot of the vendor relationships with our partners.”
Gross serves as an officer with the National Institute of Pension Administrators (NIPA), which calls itself “the voice of retirement plan professionals looking to move Third Party Administrator businesses forward.” She has been on the NIPA Board of Directors and served as its Chief Financial Officer last year.
For the 2018-19 term, Gross will serve as President-Elect, before taking on the role of President in 2019-2020.
“(NIPA) helps strengthen the retirement system across the country,” Gross said. “We get involved with plan sponsors and try to educate their employees on what a 401(k) is and how it’s going to contribute to their retirement and enable them to retire when the time comes.”
A change in thinking
The switch from defined benefit pension plans to employee-directed contribution 401(k) plans is a major reason why many Americans are facing retirement issues.
That trend, which began in the 1980s, stemmed from a change in thinking, from a faith that defined pension plans had the employee’s best interest in mind. Eventually, people chose to take responsibility for their own retirement.
But a recent study from Northwestern Mutual found that one in three Americans has less than $5,000 saved for retirement. Even worse, one in five Americans don’t have any retirement savings at all.
Simply put, when people are in charge of their own retirement, they don’t always use that money wisely.
“As time went on, people thought that they could do a better job with their own retirement funds,” Gross said. “But time has proven that may not have been such a great idea.”
Gross said the market is now trending toward a combination of defined pension plans and 401(k) plans.
“The shift is back toward a different type of hybrid-pension plan, that, in combination with a 401(k) plan, can offer the employee the best of both worlds,” she said.
The health care issue
Another major concern for those hoping to retire is the rising cost of health care. Gross said that retirement plan sponsors and employers are doing their best to work with the health care industry to anticipate future costs, but that can vary greatly depending on factors like retirement location, current health and life expectancy.
According to the Fidelity Retiree Health Care Cost Estimator, an average retired couple age 65 in 2018 may need more than $280,000 in savings just to cover their health care expenses.
“A lot of people think they can’t retire because of what they think their health care costs will be,” she said. “Employers and plan sponsors are trying to partner with the healthcare industry to sort of figure out what the costs will be.”
Part of the issue stems from the fact that Americans are living longer, despite a slight drop in average life expectancy in both 2015 and 2016. According to the CDC’s National Center for Health Statistics, the average American male is expected to live 76.1 years, while the average female is expected to reach 81.1 years.
“The longer you live, the more money you’ll need to retire,” Gross said. “It’s great that people are living longer, but it’s a little bit of a vicious circle.”
Slow, steady and consistent
Acuff & Associates is not in the business of giving financial advice – they simply administer the retirement plans.
But Gross’ experience in the industry and with her own retirement savings have led her to strong opinions on how to prepare for life’s later years.
“Everything’s great when we have a market that is going (strong),” Gross said. “At some point the stock market could make a correction. The message to give to all Americans is: slow, steady and consistent. Even if there is a market correction, just leave the money in place.”
Gross stressed that, by taking money out of your retirement plan while the market is down, the financial loss becomes locked in. That’s the problem facing many Americans who had to dig into their nest eggs during the Great Recession.
“I think people who held steady and continued to save for retirement are in much better shape than people that cashed out for some reason,” Gross said. “It varies by the individual, but when you look at the returns over the last 25 years, if you were consistent (in saving), you are good.”
So what can people do to maximize their retirement savings?
“Take advantage of whatever type of match program or contribution that your employer offers,” Gross said. “Whatever you can afford to put in, consistently put that in and watch it grow.”