Retirement at a Glance - MFS

October 2022

Retirement at a Glance

1. ESCAPE AN AUDIT IN 90 DAYS ? The IRS is initiating a new compliance enforcement strategy by sending "pre-examination" letters to selected plan sponsors. Upon receipt of the letter, the plan sponsor will have 90 days to self-audit their plan document and operations for compliance issues and respond to the IRS with their findings and descriptions of corrections made, if any. The IRS will review the report and issue a closing letter or conduct a limited or full scope audit (source: IRS).

2. BOOMERANG KIDS ? A majority of parents (70%) say they do not discuss money management or set financial expectations with their adult children. In late spring 2022, 40% of parents surveyed said they had an adult child living with them; 35% of those parents said they have compromised their long-term savings goals to help their children financially (source: Thrivent).

3. WHAT WOMEN WANT ? When asked what would be in their wish list for the 4 most valuable improvements to their employer's retirement plan, women of all marital statuses included "better explanations for whether you are on track with retirement savings." Only divorced women prioritized "more on-on-one, personalized advice" (source: Employee Benefit Research Institute).

4. SPEAKING OF DIVORCEES ? To secure rights to a former spouse's retirement assets in a divorce, a court-ordered domestic relations order (DRO) that assigns property rights must be "qualified" by the plan administrator. One of the top reasons DROs aren't qualified is because the benefit to be paid is not compatible with plan provisions (source: Department of Labor).

5. RED ROVER, RED ROVER, SEND WOMEN ADVISORS OVER ? One-third of women agree that they do not know where to go for good financial or retirement planning advice, yet over one-third (35.66%) of women plan to retire before age 65. Single, never married women (typically younger women) are most looking for advisors like them (source: Employee Benefit Research Institute).

6. SOUTHERN EXPOSURE ? Because of severe storms, the IRS has extended the tax-filing deadline, the Form 5500 filing deadline, and other tax-related acts for businesses located in or whose records are in certain counties of Kentucky, Missouri, or Arizona (to November 15, 2022) or Mississippi (to February 15, 2023) (source: IRS).

7. EMPLOYERS OUGHTA KNOW ? Employees are significantly more likely to save for retirement when they have access to a 401(k) (or similar) plan at work than if they don't. 89% of workers with access to a workplace plan are saving for retirement while only 50% of workers who are not offered a plan by their employer are saving for retirement (source: Transamerica Institute).

8. INFLATION, COLAS, TAXES, OH MY ? An estimated 8.7% cost-of-living adjustment for 2023 Social Security retirement benefits would increase the average benefit of $1,656 by $144.10. A significant increase, while welcome news for many recipients, could subject more retirees to taxation on a portion of their Social Security benefits next year (source: Senior Citizens League).

9. STATE MANDATES ? Now 12 states and 2 cities have implemented or are in the process of implementing mandatory staterun retirement programs for employers that don't offer a retirement plan (CA, CO, CT, DE, HI, IL, ME, MD, NJ, NY, New York City, OR, Seattle, VA). Almost all are auto enrollment payroll deduction IRA programs (source: Georgetown Center for Retirement Initiatives).

10. GOING BACK TO SCHOOL? ? For those considering or re-considering their career options, "nurse practitioner" is projected to experience a 45.7% growth rate in the next 9 years ? the fastest employment growth of all occupations ? as healthcare facilities increasingly use team-based models to provide patient care that would otherwise be provided by a doctor (source: U.S. Bureau of Labor Statistics)..

QUESTION ? What is the #1 reason plan sponsors choose to reevaluate their retirement, health, and other employee benefit offerings? The answer can be found by calling your MFS representative.

MFS? does not provide legal, tax or accounting advice. Clients of MFS should obtain their own independent tax and legal advice based on their particular circumstances. This has been provided for informational purposes only, and reflects the current opinion of the author which is subject to change without notice, as are statements of financial market trends, which are based on current market conditions. Past performance is no guarantee of future results. Integrated Retirement is not affiliated with MFS Investment Management? or any of its subsidiaries. Distributed by: U.S. MFS Investment Management; Latin America - MFS International Ltd.; Canada - MFS Investment Management Canada Limited. No securities commission or similar regulatory authority in Canada has reviewed this communication.

Please note that in Europe and Asia Pacific, this document is intended for distribution to investment professionals and institutional clients only.

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