In today’s low interest rate environment and diminished expectations of sustainable stock market performance, most plan participants need to be setting aside up to 20% of their earnings. But can they handle that demand on their current income? It depends on how you, as a benefit adviser, get them to that point, according to 401(k) fiduciary expert Christopher Carosa.

He recently polled financial advisers on the savings rates they estimate employees need to achieve, and 20% was a common response. That’s based on an 80% income replacement ratio and a level income and a 5% rate of return. Across a career, the resulting portfolio could be expected to generate that income for 35 years.

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