Retirement Readiness Statement
The Retirement Readiness Statement is an annual statement that is designed to show your projected monthly income from Wespath-administered retirement plans and programs, and estimated monthly benefits from Social Security, if applicable. The statement attempts to answer three questions:
How much retirement income you are expected to need
How much you are projected to have
Whether you are projected to have a gap
This overview will explain how to read the statement and answer questions you may have about how your statement was created.
Understanding Your Statement
The top half of the first page of the statement offers an at-a-glance overview of whether you are expected to meet your retirement income needs.
The projection on your statement is based on you retiring at age XX, your current plan compensation of $XX,XXX and your current contribution rate of X%. (Actual numbers are shown on your statement.)
Example: Clergy near retirement
The bar graph shows your projected future retirement income at your normal retirement age or one year from your current age if you are already past your normal retirement age. Normal retirement age is age 65, or the age at which you will have completed 40 years of eligible clergy service, if earlier.
The bar on the left shows projected retirement income if market performance is POOR (returns of -5% to 5%).
The bar on the right shows projected retirement income if market performance is AVERAGE (returns of 4% to 8%).
The box in the middle of the two bars indicates your retirement goal, which is 85% of your current compensation increased by assumed inflation until the year prior to retirement.
The color blocks on the bars represent the projected monthly income from Wespath-administered retirement plans in which you participate, as well as your estimated Social Security payments, if applicable. Consult the legend below the graph to see what color is used to represent each plan.
Plan income is determined by projecting your plan account balance or defined benefit as if you continue to work for the Church until your retirement age.
If you currently participate in any plans, your total balances are determined based on the assumption that you will continue to participate at the current level for the remainder of your career.
If you currently make personal contributions, your balances are determined based on the assumption that you will continue to contribute the same percentage of your plan compensation for the remainder of your career.
Your projected account balance is converted to monthly income using the LifeStage Retirement Income Calculator.
Social Security is a rough estimate based on current income and assuming you contribute for your full career. We do not have any information from the Social Security Administration regarding your actual level of participation or accrued benefits.
The gap is determined by comparing your monthly income to your projected retirement goal. If your projected income is less than the projected retirement goal, your statement will show a gap.
Limitations of this Statement
Be aware that the annual statement is only a projection. The amounts shown are subject to assumptions made about retirement age, retirement expenses, returns on investment, inflation and other variables. To find out more about the assumptions used to project your plan account balances, read the Assumptions and Methodology document.
If the plan compensation shown on your statement is significantly incorrect, the projection will not be reliable. We don’t always have accurate compensation because many employers calculate their own retirement plan contributions and pay those amounts directly into participant accounts. You can enter your approximate plan compensation in the online Retirement Readiness Tool and run your own projection.
Your situation may be better than projected if:
You have pensions, annuities, retirement accounts or investments outside of Wespath
You expect your income needs to be significantly less than the goal, even after customization (e.g., your mortgage or student debt will be paid off)
You will receive subsidized retiree medical benefits
Your situation may be worse than projected if:
You plan to retire before your normal retirement age as shown in the statement
Our assumptions about your Social Security income are incorrect, for instance because:
You did not qualify for or waived Social Security for all or a portion of your career
You were out of work for extended periods
You received large raises that significantly increased your pay
You plan to spend a significant portion of your account balance for a large purchase soon after retirement (e.g., to purchase a home)
Your expenses will significantly increase in retirement (e.g., you will begin paying a mortgage)
You incurred one or more breaks in service, which may impact the amount of your benefits
Also, consider your family situation. If you are married, your spouse may also be receiving compensation that may need to be replaced when he or she retires to maintain your family’s standard of living. If you are married, you may find it helpful to talk to EY Financial Planning Services rather than relying solely on this statement.
Remember that your plans or circumstances may change over time (e.g., planned retirement age, housing or health care costs, returns on accounts). Be sure to run your projections and/or speak with a financial planner periodically to stay on track.
When You Can Expect to Receive Your Statement
Statements are sent in February, May, August, and November to participants with birthdays in the preceding three months. We do not send statements to participants who are already retired or terminated, have no accrued benefit or account balance, or have no plan compensation on file. Employers who calculate their own retirement plan contributions and pay them directly to participant accounts often do not provide us plan compensation; however, you can run your own projection in the online Retirement Readiness Tool by entering your approximate plan compensation when prompted. Clergy who have already indicated their intent to retire will not receive a statement, but should instead review their plan applications for benefits and/or visit Benefits Access to review the snapshot of all your projected benefits by clicking the Review button on the homepage after logging in.
EY Financial Planning Services is available at no charge* to help you determine how much to save and how to invest. Financial counselors are available Monday through Friday from 8:00 a.m. to 7:00 p.m., Central time at 1-800-360-2539. If you have other questions, call Wespath at 1-800-851-2201. Representatives are available Monday through Friday from 8:00 a.m. to 6:00 p.m., Central time.
You can view current account information or customize your Retirement Readiness projection—by adjusting your retirement age, expected housing costs and other variables—in Benefits Access. For a primer on using the online Retirement Readiness Tool, visit www.wespath.org/seeyourfuture.
At Wespath, our ultimate goal is to help you to be financially prepared for retirement. As your responsible choice, we want to be your ally—helping you make the decisions that will give you comfort and peace of mind today and for all of your tomorrows.
* Costs for these services are included in Wespath’s administrative expenses that are paid for by the funds. Services are available to active participants and surviving spouses with account balances, and to retired and terminated participants with account balances of at least $10,000.