The 'Three-Legged Stool' of Retirement is Wobbly

Retirees have traditionally depended on a "three-legged stool" of income: their pension, Social Security, and their retirement savings. However, over the past few decades all of these have become less dependable.

Pensions are largely a thing of the past. In 1983, 62% of workers had a pension. Today only 12% of workers have a pension. And those remaining pensions are 20% underfunded.

Social Security is under great pressure. In 1945, there were 42 workers to support every beneficiary. Ten-thousand people will retire every day until 2030, and at that point there will be two workers to support every beneficiary.

Retirement savings are woefully underfunded. More than half of U.S. households do not have a retirement account. And those that do contribute on average only 3% of their income.

With pensions and Social Security largely out of investors' control, retirement-savers should focus on what they can control: their retirement savings.

Our research shows that investors can make the greatest impact by:

• Saving more. Workers should save 10% to 15% of their income for retirement.
• Paying less. Low fees are the greatest indicator of investing success.
• Investing for the long term. Trying to time in and out of markets is risky and can quickly eat away at your hard-earned savings.

For more tips, advice, and in-depth research on securing your retirement, visit Morningstar.com.