| 来源类型 | Article
|
| 规范类型 | 评论
|
| 401(k)s can fill the pension gap |
| Andrew G. Biggs
|
| 发表日期 | 2019-06-13
|
| 出版年 | 2019
|
| 语种 | 英语
|
| 摘要 | What will happen to retirement security in the United States as traditional pensions fade away and 401(k)s take their place? The answer is actually not much. Most defined benefit pension plans are not going away. For the ones that are, the savings in 401(k) accounts can more than fill the gap.
By any historical standard, retirees are doing well. Their incomes have risen faster than those of working age households, according to the Federal Reserve survey of consumer finances. The share of retirees with private retirement plan benefits has nearly doubled, while the fraction of seniors living in poverty has fallen by almost a third. Just 4 percent of seniors in the Federal Reserve survey of household economics find it difficult to get by, roughly half the rate of the working age population.
But 56 percent of retiree households continue to receive benefits from traditional pension plans, according to a Census Bureau study in 2017. Those benefits totaled $398 billion in 2012, or around a fifth of all retiree incomes, coming to about $12,200 per retiree household. That is a big hole for 401(k)s to fill once traditional pensions go away, except traditional pensions are not going away, or at least not the ones paying the majority of retirement benefits. Participation in private sector pensions has shrunk from a peak of 39 percent of the workforce back in 1973 to just 13 percent today. However, a majority of all traditional pension benefits are paid from government retirement plans. Despite some funding woes of such plans, public pensions will continue paying benefits into the foreseeable future.
In other words, 401(k)s need to replace only about a third of the benefits currently being paid from traditional pensions. Can they do it? The evidence says they can. Over the past half century, private sector pensions held investments worth roughly 15 percent to 17 percent of gross domestic product. Last year, private sector 401(k) balances were worth 29 percent of gross domestic product, while individual retirement account balances, much of which were rolled over from 401(k)s when workers switched jobs, equaled 47 percent of gross domestic product. Moreover, the amount of 401(k) savings show no signs of having peaked. Therefore, the pension gap for 401(k)s to fill is smaller than commonly believed, while 401(k) assets are also larger than commonly believed.
Continue reading here. |
| 主题 | Economics
; Aging
|
| 标签 | 401(k)
; Pensions
; Retirement
|
| URL | https://www.aei.org/articles/401k-fill-pension-gap/
|
| 来源智库 | American Enterprise Institute (United States)
|
| 资源类型 | 智库出版物
|
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/265987
|
推荐引用方式
GB/T 7714 |
Andrew G. Biggs. 401(k)s can fill the pension gap. 2019.
|
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