Pentegra Unveils Retirement Savings Guidance Tool

Pentegra Participant SmartPath generates recommended retirement savings practices to boost outcomes.

Pentegra Retirement Services has introduced the Pentegra Participant SmartPath, an online tool that generates retirement savings accumulation and investing strategies to help 401(k) plan participants achieve successful retirement outcomes. SmartPath details effective tactics—including the benefits of compounding, utilizing effective asset allocation, periodic rebalancing and understanding distribution and decumulation plans.

“Our goal is to help participants by providing them with an optimal tool they need in order to develop the best accumulation strategy possible for retirement,” says Rich Rausser, senior vice president of Pentegra Retirement Services. “SmartPath offers simple, yet essential tips for building a proper plan that will put them on the path toward successful retirement outcomes. From calculating a savings goal all the way through distribution planning, these tools take you through the whole process. Staying on track is key, which is what SmartPath is all about.”

For example, SmartPath asks investors to resist the temptation to spend money on seemingly inexpensive luxuries. If an investor were to forego a single, $4 cup of gourmet coffee each week, over the course of 25 years, that could add up to an extra $16,608 in retirement savings. Likewise, if an investor were to sacrifice $10 in magazine subscriptions each month, that could turn into $9,571. Brown-bagging lunch twice a week instead of paying $10 for a sandwich two days a week could result in $41,519. Giving up take-out dinner once a week could translate to $124,469 in savings, and skipping two movies a month for an average monthly cost of $15 could add another $14,360.

The tool makes other suggestions, including increasing savings rates by 1% to 2% a year, and what percentage of salary people should put away in order to attain a 70% income replacement ratio, with various retirement age goals. The tool tells people if they think they can’t afford to save, they’re wrong; they can’t afford not to. It also helps people determine their risk tolerance in order to find the right diversification model for their portfolio. If their plan offers target-date funds, asset allocation funds or model portfolios, SmartPath suggests that they might be better investment choices.

SmartPath also educates investors about the deteriorating impact of taking out 401(k) loans and withdrawals, and the importance of periodically rebalancing their portfolios. It also covers distribution strategies for retirees, including the benefits of purchasing an annuity.

More information about the Pentegra Participant SmartPath is available here.