Managing Personal Risk: Planning Your Retirement

Vol. 3 No. 8


There is nothing scarier than approaching retirement with uncertainty. You might have experienced this anxiety from retiring employees inquiring about their available 401K funds, or perhaps even on a personal level as you approach retirement and find yourself uncertain about how you will support yourself on limited income. To give workers a better sense of what their nest egg might look like, the U.S. Labor Department is considering having plan sponsors provide workers with insight.

In May 2013, the Labor Department posted what’s known as an advanced notice of proposed rule. This rule outlined that it might require plan sponsors to show employees what their final account balance will look like at retirement, as well as how that balance translates into monthly payments. The hope is to encourage better planning and effective saving strategies.

The proposed rule would ask sponsors to show participants several sets of numbers, such as two separate lifetime-income projections and calculations for single- and joint-life expectancy. Experts speculate that this information may be as overwhelming as the fear of participants outliving their savings, but agree that the intent is on target. It’s a work in progress and far from finalized, but has certainly created a buzz among those paying attention to headlines. The Labor Department is trying to keep that momentum going by asking for input on the notice—which is not the first time they have asked for opinions on the topic. (Comments on the Labor Department’s proposal are due by July 8, 2013. They can be submitted by e-mailing with RIN 1220-AB20 in the subject line.)

In 2010, the Labor Department received more than 700 public comments on the topic of retirement, ranging from how to communicate information to lawsuit concerns. Since then, some plan providers have created calculators to help participants get a clearer picture of what they need to be investing to meet their living expense goals. If your school offers 401K Saving Plans for employees, you can contact your provider and ask if they have materials to help your employees create a savings schedule and budget expenses.

In the meantime, however, there are free online calculators that can help give you a basic idea of what your monthly 401K investments should be.

And, yes, there’s even an app for it! 401K Calculator by Insurance Technologies, LLC.

Additional ISM articles of interest
ISM Monthly Update for Business Managers Vol. 10 No. 6 Planning for Retirement
ISM Monthly Update for Human Resources Vol. 7 No. 8 Baby Boomers Are Reinventing Retirement

Additional ISM articles of interest for Gold Consortium members
I&P Vol. 24 No. 12 Retirement Plans: Maximizing Your Teachers' Options
I&P Vol. 33 No. 11 The New 403(b) Regulations: What You Need to Know
I&P Vol. 33 No. 12 The New 403(b) Regulations: Choosing the Right Provider

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