KnowHow Archive

Plan Sponsor Guide Participant Guide

Stool Pitching

Helping workers understand the full picture

Much has been written about the growing instability of the vaunted three-legged stool of retirement savings security. Social Security remains in what seems to be a perpetual precarious state, pension plans are not as common as they once were (or as we once believed they were), and the parsimonious national savings rate is routinely reported. For a growing number of workers, their plan for retirement income is nothing more than what they think they can afford to save in their workplace retirement plan—and hope.
This month, KnowHow takes a look at the components of that three-legged stool—Social Security, personal savings, and workplace retirement programs—in an effort to help your participants gain a better understanding of the multifaceted approach to building true retirement income security that is available.
There are things you can do to help participants with this exercise. If you offer a pension plan, you can refer them to the best place to find that annual benefit approximation, whether on an annual benefit statement or online. Similarly, if you offer access to a retirement needs projector, that can offer a valuable—and certainly more precise—perspective than the relatively simplistic approaches outlined here.
You also might want to reference KnowHow from July 2008 ("Quick Check") for a quick "back of a napkin" way to calculate retirement income needs. Thanks again for your continued support of this feature. I look forward to your feedback!
—Nevin E. Adams, JD