The Retirement Pogo Stick

An economist says most Americans never had several sources of retirement income

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The metaphor most often used to describe retirement security is a three-legged stool consisting of Social Security, pensions, and personal savings. In theory, all three legs are needed to provide stable income security in retirement. AARP has since amended the stool metaphor to include continued earnings from employment and health insurance coverage as equally necessary to making your retirement stool stand.

Peter Brady, a senior economist at the Investment Company Institute, said this week that most Americans don’t have and never had all three legs of the stool. “It primarily applies to the highest income,” says Brady. For most people, “Instead of a stool we have a pogo stick: Social Security.”

It seems to me that many retiree's income streams might more closely resemble a patchwork quilt, perhaps consisting of income from 401(k)s, IRAs, personal savings, a pension, Social Security, a part-time job, and rent or royalty income. Some retirees even start small businesses.

Tell us, which metaphor suits your retirement? And can you think of a better one?