Who’s Ready to Retire?
Retirement assets of Americans have bounced back from recessionary lows of $14 trillion to $24.7 trillion. What’s changed? Most retirement funds are now socked away in IRAs and 401(k)s rather than traditional defined benefit pensions, said Dallas Salisbury, president of the Employee Benefit Research Institute.
However, only four in 10 workers participate in workplace retirement plans, leaving a sizeable population unprepared for later life. A quarter of workers say they are “not at all confident” they will have enough money for a comfortable retirement; at the other end of the spectrum, 58 percent are confident at some level.
Public sector employees, who traditionally could expect more generous pensions, now are worried by questions whether those pension funds will have the money to pay retirees in the future.
The funding gap has been fueled by more than a decade of failure by some state and local governments to pay into the funds each year; the recession; and increasing management fees, said Greg Mennis of Pew Charitable Trusts.
Mennis suggested three questions for reporters to ask about pensions: How are assets allocated? What is the fee percentage? What percentage of assets are invested locally?