Retirement security - oxymoron?

It was a given - give your working life to a company and the company would give back to you - security for your golden years, all the pension you accrued and health benefits for life. Now that given is being taken away. A recent New York Times article, one of many in a similiar vein, laid out the reality of the vanishing pension and the shift to 401(k) plans, leaving workers "on their own" for funding their retirement.

The Pew Charitable Trusts, in partnership with Georgetown University's Public Policy Institute and the Brookings Institution, began the Retirement Security Project (RSP) to help "middle- and lower-income Americans to save for a financially secure retirement." Over the last few years, RSP has published a number of papers on retirement security. The following recent reports may be of interest:

A brief 3-pager, Common Sense Reform to Promote Retirement Security (pdf, 80KB), gives an overview of 401(k)s, retirement savings mistakes, and improving the system.

The Automatic 401(k): A Simple Way to Strengthen Retirement Savings (pdf, 352KB, 16p.). Under most current 401(k)s, workers must actively choose to participate in a plan, then face daunting investment decisions, and thus may be discouraged from enrolling. Automatic plans would make participation the default option, and workers would have to actively opt out. The paper advocates automatic enrollment, automatic escalation, automatic investment, and automatic rollover.

Automatic Investment: Improving 401(k) Portfolio Investment Choices (pdf, 276KB, 12p.) expands on automatic investment from the above report.

The Smith-Conrad Retirement Security Legislation (pdf, 100KB, 11p.) analyzes the Retirement Savings and Security Act of 2005 (S. 1359, pdf, 128KB, 60p., from GPO) currently in Congress. The bill includes automatic 401(k) provisions and increasing incentives to save, but the authors conclude that other provisions relating to life annuities and tax incentives make the proposed legislation "likely to do more harm than good."


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