June 08, 2012
--- The term “retirement readiness” is all the buzz, but
what does it really mean for plan participants? ---
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.
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?"
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.
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.
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.