According to a Fidelity news release, the Retirement Income Indicator allows an employer to see how automatic enrollment, automatic deferral increase programs, and usage of lifecycle funds as the default investment option can increase the amount of retirement replacement income their assets will generate.
“Employers today rely on traditional metrics such as employee participation rates, deferral levels, asset allocation and account balances to assess the effectiveness of their plans,” said Jeffrey R. Carney, president of Retirement Services for Fidelity Employer Services Company (FESCo), in a news release. “Yet workers are being asked to think about their savings success based on how much income they can replace in retirement.”
In a study released Wednesday, Fidelity found corporate DC employees in plans it administers are on track to achieve 17% income replacement. Fidelity recommends a goal of saving enough to generate 85% of an investor’s pre-retirement income.