Measure Retirement Readiness to Guide Education & Design

Retirement readiness is the ability of your employees to retire, often at 65. So it’s key to measure the readiness of each participant—and the whole plan. Knowing which employees are on and off track should guide education efforts and plan design.

Retirement income typically includes social security and pensions combined with personal savings and 401(k) plans. Ideally employees will want to replace at least 75% of their working income.

Plan participants can be very surprised when they learn how little monthly income they will enjoy from their current 401(k) nest egg when taken at a prudent withdrawal rate and after taxes. The good news is that retirement readiness can be improved. Here are a few strategies than can help:

  • Periodic, actionable retirement readiness reports

  • Personalized one-on-one fiduciary counseling

  • Well planned, recurring employee education

If the retirement readiness of your employees is less than optimal it may be time to reevaluate your plan’s current advisor and provider.

Allen Woodard