PSNC 2012: How Much is Enough?

June 8, 2012 ( - The term “retirement readiness” is all the buzz, but what does it really mean for plan participants?

By Corie Russell | June 08, 2012
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Retirement readiness means participants have accumulated enough wealth to retire with dignity and “retire on their own terms,” said Erica Stebe, assistant vice president, client communication consulting at MassMutual Retirement Services, a panelist at the 2012 PLANSPONSOR National Conference.

Some participants may want to retire at age 55, while others may want to continue working. It is not just about having adequate income, but also about asking, “Are you healthy enough to retire? Are you mentally prepared to retire?" Stebe added. 

Retirement readiness must be measured on an individual level rather than just a plan level because the definition varies from person to person, said David Roberts, benefits manager at Intersil Corp.

So how can participants achieve retirement readiness? And how can plan sponsors and advisers help them achieve it? For starters, Stebe said plan design and communication must go hand in hand.   

A plan design with automatic enrollment at 3%, Stebe cited as an example, gives participants a false sense of security and may cause them to continue contributing the same amount throughout the years.