Separately, a paper from Prudential Financial Inc., of Newark, N.J., outlines steps that individuals can take to boost their retirement preparedness, including:

Planning for the possibility of working a few years longer than the traditional retirement age of 65. Doing so has the triple benefit of delaying the receipt of Social Security by a few years to increase monthly benefits, earning wages and accumulating savings for a few more years, and drawing down on savings for fewer years in retirement.
Ramping up the rate of savings to increase the probability of retiring at age 65 or earlier.
Insuring retirement income against the risks of longevity and market uncertainty through guaranteed lifetime income products.

The paper encourages employers to consider helping workers achieve retirement security by:

Enhancing defined contribution plans by adding features such as automatic enrollment, automatic escalation of contributions and in-plan guaranteed lifetime income products that increase savings.
Encouraging employees to track their savings progress in terms of an income goal, rather than a savings goal, at a realistic target retirement age.

For financial advisors, the paper notes the importance of:

Developing an appropriate target retirement age that is customized for each individual.
Showing the positive impact that a few extra years of employment can provide in terms of increased financial security.
Framing the retirement planning in terms of future retirement income rather than a savings objective.

For policymakers, the paper highlights ways they can help Americans achieve a more secure retirement, including:

Creating safe harbors that address potential employer concerns regarding the addition of guaranteed lifetime income products to defined contribution plans.

Passing legislation that lets more employers offer a retirement savings plan in the workplace through Multiple Small Employer Plans.
Adopting proposed regulations that require defined contribution plans to project future monthly income on participant statements.

Instant Insights /

Half of US households aren't ready to retire

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