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Thu Mar 14, 2019, 01:02 PM

3 ways people may save for retirement in the future

The vast majority of Americans who save for retirement do so through a plan provided by their employer ó typically a 401(k). But we may have reached the limit of what our employer-sponsored system can do to support a secure retirement. Today, only about half of private sector businesses offer retirement benefits. And while about 140 million people participate in retirement plans, the proportion of the employed workforce covered by these plans has never gone above 70 percent.

Congress could increase incentives to encourage more employers to sponsor plans, but offering retirement benefits is a voluntary decision by employers who are juggling many priorities and demands. Research by The Pew Charitable Trusts shows that small employers, the least likely to offer retirement benefits, are put off by both plan startup costs and administrative burdens, and itís not clear a new tax break would overcome these concerns.

In fact, the voluntary nature of the current system and current workforce trends raise the possibility, however undesirable, that existing plan sponsors could stop offering or reduce retirement benefits in large numbers. While no research indicates that employers intend to completely end plan sponsorship, the past 30 years has seen an ongoing shift as they have moved away from offering certain benefits such as traditional pensions and indemnity health insurance plans. The 401(k) plan is generally less expensive to run than a traditional pension, but small plan sponsors typically face plan operating expenses that are, as a percentage of assets, 2 or 3 times higher than costs borne by large plans.

Of course, people without a workplace-based plan could still save for retirement on their own, but less than 15 percent of all American households contribute to an individual retirement account outside of work.

https://www.marketwatch.com/story/3-ways-people-may-save-for-retirement-in-the-future-2019-03-14

Congress continues to fiddle while ignoring Medicare and Social Security funding issues as the Baby Boomer generation surges toward retirement with inadequate savings. The next 10 years will be even more trying times in this country.

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Reply 3 ways people may save for retirement in the future (Original post)
Zorro Mar 14 OP
SWBTATTReg Mar 14 #1
PoindexterOglethorpe Mar 14 #2

Response to Zorro (Original post)

Thu Mar 14, 2019, 01:07 PM

1. Another scary thing is that Congress (from what I heard over the last year or so) was ...

looking to do away with the 401Ks, in order to raise more revenue. Yikes. I hope that this doesn't go anywhere. Otherwise, what other recourse will people have?

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Response to Zorro (Original post)

Thu Mar 14, 2019, 01:32 PM

2. "The proportion of the employed workforce covered by these plans has never gone above 70 percent."

And not everyone whose employer offers a 401k bothers to enroll.

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