Three obstacles your plan can overcome

Your employer’s tax-deferred retirement plan offers you the chance to enjoy a comfortable future. Nonetheless, three challenging factors – longevity, inflation and potentially inadequate Social Security checks – can compromise your plan’s long-term stability.


Thanks to advances in health care, life expectancies for both men and women continue to rise. Today, a 65-year-old man can expect to live, on average, nearly to age 82. At age 65, life expectancy for a woman is almost 85.* And because these are just averages, living into your 90s is a real possibility.

Living longer means you’ll need a nest egg that can support a long retirement, one that could stretch for two or three decades. The last thing you’ll want is to outlive your savings.

How your company's retirement plan can help

Starting to save for retirement now in a 401(k) can give you the best chance to build assets that can last for your lifetime, no matter how long your retirement.


Inflation, the steady rise in the cost of goods and services, can eat away at the value of your savings. For example, in 20 years, a 3% annual rate of inflation can reduce the purchasing power of a dollar to just 55 cents. As this chart illustrates, inflation can make nearly every product and service you buy more expensive.

Inflation can be particularly burdensome for retirees, many of whom are on fixed incomes that don’t keep up with inflation.

How your company's retirement plan can help

Your 401(k) plan offers mutual funds that invest in stocks and bonds, which historically, have outpaced inflation over long periods of time.

Inadequate Social Security checks

Much has been written and said about the future health of Social Security. We're not fear-mongers – we don't believe the government will allow Social Security to disappear – but we are realists. We know that the Social Security program was never designed to provide more than a modest portion of retirement income.

For example, a 40-year-old worker now earning $50,000 a year, would receive at age 65 an estimated monthly benefit of $1,464 (in today's dollars) – just 35% of his or her current paycheck.

Could you live on 35% of your current income? Few people could.

How your company's retirement plan can help

Any Social Security income you receive will be welcome, but it's not going to be enough to keep you comfortable. To avoid falling short every month in retirement, use your 401(k) to pursue potentially substantial growth in the stock and bond markets.