GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
BACKGROUND INFORMATION FOR TRAINERS:
The Social Security Act was signed into law in 1935. This retirement benefits plan was
intended to be a foundation to supplement pensions and savings, and to provide a
minimum financial protection during retirement.
As personal savings have dwindled and pensions disappear, people who have reached
retirement age sometimes depend on Social Security as their only source of income
after their working years have come to an end.
What Is the “Three-Legged Stool” for Retirement Security?
The “three legged” stool for retirement security consists of:
 Social Security
 Pensions
 401K, IRA, investment earnings, savings accounts
Social Security is a nearly universal earned benefit that is guaranteed and is adjusted
for the cost of living. Most workers who have been earned at least 40 credits (in 2014,
$1,200 = one credit) and are at least age 62 are eligible. Benefit amounts are currently
based on two factors: a worker’s lifetime earnings, which are then adjusted or “indexed”
for changes in average earnings since the year they were first paid into the Social
Security program, and for the 35 years in which the worker earned the most income.
Three things can change a retiree’s benefits amounts:
 If a worker retires early (as early as age 62), the amount will be reduced by a
certain percentage based on the age at retirement.
 Cost of living allocation (COLA) increases. Even if a worker waits until full
retirement age to receive benefits, COLA increases are added beginning the year
the worker turns 62.
 An increased benefit amount results when retirement is delayed until age 70*,
which is the full retirement age.
Each year, benefit amounts are adjusted according to the rise (if any) in the Cost of
Living Adjustment (COLA). The COLA is measured by the Consumer Price Index for
Urban Wage Earners and Clerical Workers (CPI-W), and prepared by the Bureau of
Labor Statistics (BLS). Social Security is funded primarily through payroll contributions
shared by workers and employers.
Other ways workers may be eligible for Social Security benefits: Social Security
Disability and Survivors Benefits. To qualify for Social Security Disability benefits, a
person must have worked in jobs covered by Social Security, and must have a medical
condition that meets Social Security’s definition of “disability.” Social Security Survivors
Benefits are paid to family members of the deceased worker, including the worker’s
GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
widow or widower, the worker’s divorced spouse, and the worker’s minor or disabled
child.
For more information about Social Security retirement benefits, see
http://ssa.gov/pgm/retirement.htm
Learn more about Social Security Disability benefits here:
http://www.ssa.gov/dibplan/dqualify.htm
Information about Survivors Benefits can be found here:
http://www.socialsecurity.gov/survivorplan/ifyou.htm
There are two kinds of pension retirement plans: Defined Benefit and Defined
Contribution. Most individuals are more familiar with Defined Contribution plans. The
main difference is that a Defined Benefit is a fixed amount of money that a retiree can
expect; a Defined Contribution is riskier because it fluctuates and is based upon private
investments into a volatile marketplace.
Pensions are a Defined Benefit (DB). The money contributed is pooled and paid in a
defined monthly amount upon retirement. The amount an employee receives is usually
determined by three factors: years of service, amount of pay at the end of the worker’s
career, and a fixed percentage (multiplier) of pay.
There are two types of DB pension plans: public and private. Public DB plans are
usually funded by contributions from both the employer and employees. Private DB
plans are usually funded only by the employer. The money is then invested by trustees.
All DB plans are a mix of investments: equities, bonds, other investments, and cash.
When appropriate, the trustees make changes to the way plan funds are invested.
For more information on pensions, see
http://www.nirsonline.org/index.php?option=com_content&task=view&id=338&Itemid=1
16
In some areas, public employees are not covered by Social Security retirement benefits.
For a list of locations see http://www.nea.org/home/16819.htm.
401Ks, IRAs, and Savings are Defined Contribution (DC) plans. DC plans do not
promise a specified monthly amount when an employee retires.
Contributions to 401K plans come from employers, employees, or both. Sometimes the
amount contributed is a specified percentage of the employee’s income, and the money
is then invested on the employee’s behalf. Upon retirement, the worker receives the
account balance, plus or minus gains or losses from the plan investments.
GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
To learn more about 401K plans, go to http://www.irs.gov/RetirementPlans/401%28k%29-Plans.
Individual Retirement Accounts (IRAs) are funded only by the employee. There are
two types of IRAs - Traditional and Roth. Contributions to a traditional IRA may be
partially or fully deductible, and are generally not taxed until the funds are distributed.
Roth IRA contributions are not deductible, and qualified distributions are tax free if
certain requirements are satisfied. There are limits to the annual amount workers can
contribute to IRAs. Money in either a Traditional or Roth IRA can be withdrawn at any
time, although taxes or penalties may apply.
For more information on IRAs see http://www.irs.gov/Retirement-Plans/IndividualsRetirement-Arrangements---Getting-Started.
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GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
Why Are All the “Legs” Important?
Multiple sources of retirement income help to provide financial stability. Social Security
was not designed to stand alone, and it only provides minimum protection for retirees. In
order to live more comfortably, other retirement income resources are necessary.
Pensions provide a defined benefit that will remain the same throughout a worker’s
retirement years. 401Ks and IRAs allow workers to use defined contributions to
maximize investments through their own contributions and/or contributions from
employers. Savings allow workers to build a cash reserve, or “nest egg,” that is readily
available. Having multiple income sources gives retirees the flexibility to control how
and when they receive their money. Using Social Security as the foundation, people
preparing for retirement can save and invest in order to build further retirement security.
For information on the history of the “Three-Legged Stool” for retirement security see
http://www.ssa.gov/history/stool.html.
What We Believe About Retirement Security

Everyone in America should look forward to retirement free from financial worry
and economic hardship.

We strive to close the gaps of income inequality by strengthening employee
wages and benefits. Nobody in the richest country in the world should be forced
to work until they die.

We want all workers to be able to retire with respect, dignity, and the confidence
that they will maintain a quality standard of living.

We will fight for a comprehensive and sustainable retirement system that
supports all three legs of the stool, values all workers’ contributions, and
ensures these foundational supports will be there now and for future
generations.
What Are Solutions to Strengthen Retirement Security For All?
“Scrap the Cap!”
Social Security taxes are paid on the first $117,000 of income. Zero taxes are paid on
income beyond $117,000. If Social Security taxes were paid on all income, we could
ensure the permanent stability of the program and maybe even make improvements to
it.
GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
Tell Federal Lawmakers About the Importance of Retirement Security
Developed by the Campaign for Community Change, the Grassroots Voices for
Retirement Security is fighting to make sure retirement programs are strengthened, not
cut, to ensure that Americans can retire with dignity. Learn and share at
http://www.retirementsecurityvoices.org/.
Give “Caregiver Credits”
People who spend an extended period of time caring for family members lose
retirement security benefits during the time they spend helping their loved ones.
Ensuring “caregiver credits” allows workers to focus on family members rather than
worrying whether their own benefits will be negatively affected.
Implement the Consumer Price Index for the Elderly (CPI-E)
One policy recommendation is to implement a Consumer Price Index for the Elderly
(CPI-E) that would more accurately reflect the cost of living for seniors and allow for
annual adjustments in Social Security retirement benefits that are based on the CPI-E.
Prevent reforms that would means test for Medicare benefits.
When programs become means-tested, they are more likely to be underfunded and
perceived as a “poverty program.” The Medicare program should remain available
regardless of income level.
Tell Federal Lawmakers About the Importance of Strengthening Housing
Programs
There is a current housing crisis in this country, and adequate, affordable housing is
becoming increasingly difficult to obtain. Provisions that deny people access, as well as
an overall reduction in housing stock, prevent people from finding adequate shelter in
their later years.
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GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
“TRAIN THE TRAINER” ACTIVITY
Total time: 20 to 30 minutes
____________________________________________________________________
TRAINER MESSAGE:
5-Minute Welcome and Introduction
Good morning/afternoon/evening. My name is ____________________ and I am a
grassroots ambassador with __________________ (name of organization.) I would like
to welcome you to our Three-Legged Stool training activity.
Our goal for today’s activity is to prepare you to teach others:




What the “Three-Legged Stool” for retirement security is
How the “legs” must be stable now and for the future of our retirement
The principles and solutions we advance for retirement security
Ways we can all take action
Now that I have introduced myself to all of you, it’s your turn to introduce yourselves. As
we go around the room, please say your name and give us one word that describes
how you’re feeling today.
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GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
OPTIONAL:
10-Minute Ice Breaker Activity
“My Life” Juggle
Materials needed for this activity:
 3 to 5 soft balls of different sizes (i.e., Nerf ball, soft rubber ball, or stuffed ball)
 Bandage (i.e., adhesive bandage, gauze, or wrap bandage)
 Box of macaroni and cheese (or other lightweight boxed food item)
 Pretend “past-due” bill (printed on 8-1/2 x 11 paper or cardstock)
 Pretend paper money (printed on 4 x 6 paper or cardstock)
 Box of matches
 Toy watch or small timer
TRAINER MESSAGE:
Let’s stand and form a circle. I am going to hand one person a ball and ask that you
pass it around the circle as quickly as possible. One by one, I will hand more balls to the
first person. Keep passing them around the circle as fast as you can!
(TRAINER: hand a second ball to the first person, then the third ball, etc. Allow the
group to become comfortable with passing the balls around the circle.)
TRAINER MESSAGE:
Sometimes juggling life is easy.
We go to work or school; we take care of children, grandchildren, or our parents. We
go shopping, cook, and clean, save money, pay our bills - all the things that make life
run smoothly.
(TRAINER: gently toss toy watch to the first person.)
Then at the end of our working lives, we retire and receive our “gold watch” as a reward
for working so hard all our lives.
But sometimes, things happen that are beyond our control.
(TRAINER: gently toss paper money to the first person.)
GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
For instance, we might lose money from being sick, or from the loss of a job. Or maybe
we have to stop working due to an injury, or to care for a family member.
(TRAINER: gently toss the “past-due bill” to the first person.)
Losing money means we have to make difficult decisions about paying for the things we
need.
(TRAINER: gently toss the box of macaroni and cheese to the first person.)
Like food.
(TRAINER: gently toss the bandage to the first person.)
Or health care.
(TRAINER: gently toss the box of matches to the first person.)
Or heat for our homes.
(TRAINER: Allow the group to keep passing the items around for a few more seconds.)
We think we will get things back on track, and life will once again run smoothly. But
sometimes, that simply cannot happen. Then we reach retirement age. Please stop
passing the items.
QUESTIONS:
How did it feel when your group was only passing the balls around in the circle?
As other items were added to the circle, did it become more difficult to pass them
around?
How would it feel to juggle all these things knowing you are receiving low or sporadic
income?
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GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
The Three-Legged Stool (10 minutes)
Materials required for this activity
 “3-Legged Stool for Retirement Security” poster, preferably mounted on a foam
board or adhered to the wall
 One-page handout about pensions
 Information about your organization
TRAINER MESSAGE:
Now that we have become better acquainted, let’s learn about the “three-legged stool”
for retirement security.
The three legs are:
 Social Security
 Pensions
 401Ks, IRAs, and personal savings
Social Security is available for almost all workers and is adjusted for rises in the cost of
living. Employers and employees contribute to Social Security, and workers receive a
defined amount based on earnings over a lifetime. The benefit amount may be
increased if the cost of living rises, or decreased if a worker retires before their full
retirement age. Benefits increase if a worker waits until full retirement age to retire.
TRAINER; Refer to poster for the following section
Pensions that are a Defined Benefit plan. Employees and/or employers contribute to a
pool of money that is invested. Retirees receive a defined amount upon retirement,
usually determined through a combination of years of service, the amount of earnings at
the end of a worker’s career, and a predetermined percentage of the worker’s earnings.
You do not have to guess what your benefit amount will be.
Pensions that are also called 401Ks, Individual Retirement Accounts (IRAs), and
personal savings are Defined Contribution plans and do not promise a specified monthly
amount when an employee retires. Contributions to 401K plans come from employers,
employees, or both. The money is then invested on the employee’s behalf. Upon
retirement, the worker receives the account balance, plus or minus gains or losses from
the plan investments. IRAs are funded only by the worker. Some contributions are tax
deductible, others are not. Withdrawals from an IRA may be made at any time although
penalties and taxes may apply.
Social Security was never intended to be the sole source of income for retirees. It was
created as a foundational supplement to pensions, investments, and savings. In order
for Americans to retire with dignity and a good quality of life, multiple sources of
GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
retirement income are necessary. When workers have healthy pensions, investments
and savings, they can have the option to retire before full their retirement age, allowing
them to maximize payments from Social Security.
The principles and we advance for retirement security
:
 Everyone in America should look forward to retirement free from financial worry
and economic hardship.

We strive to close the gaps of income inequality by strengthening employee
wages and benefits. Nobody in the richest country in the world should be forced
to work until they die.

We want all workers to be able to retire with respect, dignity, and the confidence
that they will maintain a quality standard of living.

We will fight for a comprehensive and sustainable retirement system that
supports all three legs of the stool, values all workers’ contributions, and
ensures these foundational supports will be there now and for future
generations.
The solutions we advance for retirement security:
One solution is to “scrap the cap” on income. Workers pay Social Security taxes on the
first $117,000* of income, but nothing on income above that amount. If we were to
collect Social Security taxes on all income, we could ensure that the program remains
permanent, and we could potentially improve benefit amounts. Scrap the Cap!
*Amount changes annually
Another solution is to establish “caregiver credits.” People who spend an extended
period of time caring for family members lose retirement security benefits during the
time they spend helping their loved ones. Ensuring “caregiver credits” allows workers to
focus on family members rather than worrying whether their own benefits will be
negatively affected.
One policy recommendation is to implement a Consumer Price Index for the Elderly
(CPI-E) that would more accurately reflect the cost of living for seniors and allow for
annual adjustments in Social Security retirement benefits that are based on the CPI-E.
Another way to strengthen retirement security is to prevent reforms that would means
test for Medicare benefits. When programs become means-tested, they are more likely
to be underfunded and perceived as a “poverty program.” The Medicare program should
remain available regardless of income level.
GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
Strengthening housing programs is also important. There is a current housing crisis in
this country, and adequate, affordable housing is becoming increasingly difficult to
obtain. Provisions that deny people access, as well as an overall reduction in housing
stock, prevent people from finding adequate shelter in their later years.
Establishing a fair and progressive tax structure would go a long way towards
strengthening retirement security. Everyone - including corporations - should pay their
faire share in taxes that fund retirement and other support programs.
Strengthening foundational support programs, such as unemployment insurance,
Supplemental Nutrition Assistance Program (SNAP), and expanding public-supported
health care programs such as Medicaid and Medicare
There are also ways to take action:
Contact your lawmakers. Know who your representatives are and how to contact them.
(TRAINER: Provide information about how to contact federal lawmakers (U.S.
Representative and U.S. Senators) who represent your area. Include phone number,
mailing address, and e-mail address. Consider providing handouts for participants to
take with them.)
Write letters to the editor of your local newspaper. Before writing the letter, check the
newspaper’s guidelines for submitting letters.
Attend an action, rally, or postcard campaign hosted by
___________________________ (name of organization).
(TRAINER: Provide contact information for newspapers within the training area. Include
mailing address and e-mail address. Consider providing handouts for participants to
take with them.)
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GRO - Grass Roots Organizing
Three-Legged Stool Training Activity
5-Minute Action/Q&A Activity
Materials required for this activity
 Postcards pre-addressed to U.S. Congress representatives for your area
Let’s take action now! I am providing you with postcards addressed to ___________
(Congress people). Please take a moment to fill out the information requested and send
a message that you believe ALL AMERICANS should be able to retire with dignity and
enough financial resources to ensure a good quality of life.
Another action we can take is to tell our personal stories. Americans need to be sure
that when they reach retirement age, they do so with dignity and enough resources to
maintain a good quality of life. By telling our stories, we can tell lawmakers that they
should work to strengthen, not cut, financial resources for retired workers, and help
them begin to think about other types of workers such as caregivers and domestic
workers. Tell our stories!
(TRAINER: Consider having pre-addressed postcards available with a pre-printed
message about retirement security. Ask participants to fill in their name and contact
information. As your audience is filling out the postcards, ask if there are any questions.
Refer to “Background Information” for help answering questions about information not
covered in the activity.)
Thank you for participating in our activity! I hope that have learned information about the
“three-legged” stool that will help you educate others and motivate them to action.