It’s critical for individuals to have an idea of how much retirement income will be generated by their current savings strategy, says Janice Holman, a principal and leader of Eckler’s DC practice.
The firm’s Capital Accumulation Plan Income Tracker (CAPit) shows that replacement income levels were unchanged from March 31 to June 30, at 63%.
While equity markets were strong in the first six months of 2014, declining interest rates pushed annuity purchase rates up higher.
Plan sponsors can help their members to understand what retirement income their current savings level will provide, she says, adding that members can use that information to create a savings plan that works for them.
“Blind saving is dangerous for employees, since they may find they are not in a position to retire when they would like,” Holman explains. “And it’s dangerous for employers, since they’ll be left to deal with the workforce planning issues this creates.”
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