As the baby boomers near retirement, defects in the nation’s private pension system are becoming obvious. Only about half of workers contribute to an employer-sponsored pension plan in any given year, and Individual Retirement Account (IRA) participation rates are substantially lower. Among workers with tax-preferred retirement saving plans, few make the maximum allowable contribution. And despite the many private savings incentives, many households approach retirement with meager funds.
American workers need savings plans that will adequately fund their retirement. We recommend changes in the current system that provide flexibility, versatility and expanded investment opportunities. These are keys to encouraging workers at all income levels to invest in their future retirement, today.
Pew is no longer active in this line of work, but for more information visit the Retirement Security Project on PewHealth.org.