The classic three-legged stool approach to retirement security of employer pension, Social Security and personal savings is looking wobblier than ever these days.
Traditional pensions are fast disappearing, the long-term outlook for Social Security is cloudy and retirement accounts have been walloped by stocks’ steep decline. The turmoil in financial markets has wiped out some $2 trillion from Americans’ retirement accounts since the middle of 2007, the Congressional Budget Office said earlier this month – more than 20 percent of their value.
“This is certainly the most uncertain time in many decades for people approaching retirement,” said John Nelson, co-author of “What Color Is Your Parachute? For Retirement” with Richard Bolles of the best-selling “What Color Is Your Parachute” career guide.
Nelson, 49, a retirement researcher and lecturer in consumer science at the University of Wisconsin, created a retirement model that has been selected for the retirement readiness program for federal employees. His Retirement Well-Being Model is a research- and philosophically based tool designed to factor in health and happiness, as well as finances, as people plan and set goals for retirement.