UAlbany News Center
Facebook Twitter  Youtube  
Watch UAlbany TV
Contact: Media Relations Office (518) 956-8150

Maintaining Purchasing Power Critical to Retirement Success

Q&A with UAlbany Clinical Professor of Finance Ross Miller

It is never too early to start saving for retirement, says UAlbany Clinical Professor of Finance Ross Miller. Ideally, one should start making the maximum 401(k) contribution that will be matched by an employer after graduation.

ALBANY, N.Y. (August 6) -- A survey conducted by LIMRA, a trade association for the financial services industry, shines light on a startling reality -- nearly 50 percent of all Americans are reportedly not contributing to a retirement plan. Given the weak economy and the uncertain future of social security benefits, it is imperative for Americans to take precautions in planning financially for the future.

University at Albany Clinical Professor of Finance Ross Miller is an expert on 401(k) and other retirement plans, derivative securities, program trading and mutual fund performance. He offers basic guidance on developing a savings plan, retirement health care costs and the long-term outlook for social security.

Q: When should you start saving for retirement?

A: It is never too early to start saving for retirement. Ideally, one should start making the maximum 401(k) contribution that will be matched by an employer after graduation.

Q: Based on current employment and savings projections, how much should you save, and is that on top of 401(k)’s or projected social security income?

A: It depends greatly on individual circumstances, which are very much likely to change over the next decade or two. Anyone who is 35 years old or older should use professional financial planning tools to help develop a savings plan. The high cost of family formation before 35 makes it difficult for most people to save much beyond the 401(k) contribution that gets the best match.

UAlbany Professor of Finance Ross Miller
UAlbany Clinical Professor of Finance Ross Miller

Q: Will social security benefits still exist for people just entering the workforce now?

A: Social security should continue to exist indefinitely in some form because the political cost of discontinuing it or even phasing it out, is too high. However, social security is likely to provide less purchasing power for future retirees than is provided to current retirees.

Q: What’s the best approach for handling taxes – taking fewer or more deductions? What role do deductions play in terms of savings?

A: Tax planning is particularly tricky given that tax rates are expected to go up in the future. People with uneven income streams would be wise to look into converting some of their retirement funds into Roth-IRAs during their low-income years. When timing is not a factor, paying fewer taxes today through deductions, credits, etc. is almost always the best move.

Q: How should I account for health care costs when considering retirement planning?

A: Expect health care costs to increase faster than the overall rate of inflation for the foreseeable future. Even health care benefits that are received during retirement under an employee’s health plan are likely to become less and less generous, with larger co-pays and additional exclusions over time. Similarly, anyone depending solely on Medicare should expect out-of-pocket expenses to continue to rise indefinitely.

Learn more about UAlbany's School of Business.

For more news, subscribe to UAlbany's RSS headline feeds

Educationally and culturally, the University at Albany-SUNY puts "The World Within Reach" for its 17,500 students. An internationally recognized research university with 50 undergraduate majors and 125 graduate degree programs, UAlbany is a leader among all New York State colleges and universities in such diverse fields as public policy, nanotechnology and criminal justice. With a curriculum enhanced by 300 study-abroad opportunities, UAlbany launches great careers. For more information about this globally ranked University, visit For UAlbany's extensive roster of faculty experts, visit