Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. This is the news you need to know in the fight for a secure retirement.
Here are our top stories:
4 Reasons to Rethink Your Retirement Income Strategy by Benjamin Roussey. According to the National Institute of Retirement Security, most Americans do not have enough saved for retirement and are concerned about outliving their nest eggs. In his Op-ed for Real Daily, Benjamin Roussey suggest that those looking to retire should “rethink” and “recalibrate” their retirement funding strategy for four reasons:
- The growing cost of healthcare
- Longer average lifespan
- Reduction in purchasing power
- The chance of outliving your money
As NPPC has covered before, healthcare and other retirement expenses significantly damper retirees’ nest eggs. Most retirees are unaware of the significant costs that come with retirement, nor are they prepared for them. Aside from the many expenses that come with retirement, many retirees are living longer. Unlike defined-contibution plans, such as 401(k)s, pensions provide a secure retirement that is guaranteed for life.
New Data Reveal Inequality in Retirement Account Ownership by Maria G. Hoffman, Mark A. Klee, & Briana Sullivan. A 2021 report by the Survey of Income and Program Participation (SIPP) revealed the inequality in retirement account ownership. The 2021 survey included new questions “that help shine a light on how people were preparing for retirement in 2020.” The findings showed a disparity in the ownership of retirement accounts not only by race, but also by age. According to th report, non-Hispanic White individuals were more likely to own a retirement account at 54%, while Hispanic individuals had the lowest ownership rate at 28.3%. Concerning the disparities among age groups, Baby-boomers ages 56 to 64 were the most likely to own at least one type of retirement account at 58.1%. The rate of ownership steadily dwindled with the younger generations, with only 7.7% of Gen Zers having retirement account ownership. However, “while members of Generation Z were least likely to own a retirement account as of 2020, they also have the most time to accumulate additional retirement savings.”
Be sure to check back next Friday for the latest news in the fight for a secure retirement!