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Planning for Retirement

The Three-Legged Stool

A common metaphor for the elements of a good retirement plan is the three-legged stool. The three legs of the stool can be thought of as:

  • Social Security
  • Employer-sponsored retirement plan
  • Personal savings and assets (IRAs, CDs, home equity, etc.)
A stool with one leg will fall. A stool with two legs requires a delicate balancing act, while a stool with three legs provides the greatest stability.
 
Social Security will likely provide you with one strong leg, but without an employer-sponsored retirement plan and/or adequate personal savings, you may not have enough money to pay for post-retirement expenses. Strengthen all legs as much as possible.