Retirement plan participants whose savings aren’t quite up to par are now able to get a graphic demonstration of that online, thanks to the Principal Financial Group.
Those who are doing really well will get a little motivation to stick with it, too, since the “Retirement Wellness Score,” according to the company, represents the percentage of a participant’s preretirement income they are able to maintain at retirement.
The wellness score takes into account a variety of income sources that include account balances, contribution levels and benefits in retirement plans (including defined contribution, defined benefit and nonqualified), outside savings that the participant enters into the system, and even an estimate of income from Social Security. Together with other assumptions and data, all those income sources are processed and the score is revealed online in a range from zero percent to 100+ percent.
The system demonstrates the status of a participant’s standing at retirement based on present data in a red-yellow-green format, with the score embedded in a color-coded band that represents different ranges of income replacement:
- 70 percent to 100+ percent falls, as one might expect, within the green band;
- 50 percent to 69 percent in the yellow band; and
- Zero percent to 49 percent in the red band.
“It’s important to begin the retirement-planning process with a goal in mind — a desired outcome,” said Jerry Patterson, senior vice president of retirement and investor services at the Principal, in a statement. “We believe the retirement wellness score is a great place to begin. This one number, displayed front and center on every participant’s account home page, allows them to know in real time whether they’re on track for a secure retirement.”
Patterson continued, “The score is straightforward, simple and easy to understand. The resources on the new account homepage enable participants to quickly and easily model and implement changes to their savings strategy to improve the score.”
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
