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It’s no coincidence to many experts that the retirement gap, what people need in retirement and what they actually have, has widened with the demise of traditional pensions, particularly in the private sector.
The trend continues, with more companies closing their plans to new hires, writes Carrie McCabe for Forbes, citing the recent decision by United Parcel Service to freeze its plan.
“Not surprisingly then, at the same time as this trend from DB pensions to individual savings (DC-type schemes) is occurring, the retirement gap — or the money a family needs to retire vs. the money a family has to retire — has widened,” she writes.
In a new study from the Economic Policy Institute, ‘The State of American Retirement- How 401(k)s have failed most American workers,’ author Monique Morrissey discusses how savings have dwindled as traditional pensions have declined.
“And to further exasperate matters, many individuals do not realize their need to save more in their individual savings account as they do not have the benefits of economies of scales, investment skill, and risk budgeting of a DB plan approach,” writes McCabe.
More: Little to no savings in retirement accounts.

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 – sitemanager@ariapensions.ca

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