Something to Consider

(Click on the image for the report)

The U.S. retirement system is supported by three main pillars: Social Security, employer-sponsored pension or retirement savings plans, and individual savings. Currently, each of these pillars faces challenges.

• First, Social Security is projected to be unable to pay full retirement benefits beginning in 2035, which could require future benefits to be reduced or delayed.
• Second, fewer employers offer DB [Defined Benefit] pension plans, and the insurer of most of these plans, the PBGC, faced an accumulated deficit of more than $79 billion at the end of fiscal year 2016. Workers who participate in DC [Defined Contribution] plans must often navigate complex financial decisions to plan for and manage their accounts, and many may be at risk of outliving their savings.
• Third, millions of workers do not have access to either a DB or a DC employer-sponsored plan, and their personal savings may not be enough to last through retirement. The personal saving rate in the United States, while improved since 2005, has not returned to its pre-1975 level.

Should Social Security benefits and other income sources prove inadequate, federal safety net programs, such as those providing nutrition and housing assistance, may face additional budgetary pressure from retirees. Unless action is taken to address all these challenges, many older Americans could lack the means to have a secure and dignified retirement in the future.