Benefits And Benefits Of Retirement Security

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Retirement security is a very broad term that refers to the confidence a person has in their economic resources to support them through the end of their life at a standard of living consistent to what they enjoyed prior to retirement. For most people, retirement income will come from personal savings and investments, Individual Retirement Accounts (IRAs), Social Security, defined benefit plans, and defined contribution plans (, 2016). Employers have traditionally played an integral role in the U.S. retirement system, offering either a defined benefit (DB) plan or defined contribution (DC) plan as part of their employee’s benefits package. A DB plan is not voluntary and uses a formula that credits every year of…show more content…
and AIG, move to freeze their DB plans (, 2016). The Current Population Survey (CPS) found that U.S. workers’ access to employer-sponsored retirement plans fell by 8 % from 1999 to 2011. As of 2011, only 53 percent of U.S. employees worked for an employer who offered a retirement savings plan of any type (DB and / or DC plans) as part of a benefit package. Even if an employer offers a retirement plan, employee participation in the plan is not guaranteed. Employers can exclude certain employees from participating in their retirement plan. Common categories of excluded employees include those with less than 1 year of service, part-time workers, or workers younger than 25. Employees can also vary their participation in a DC plan, raising or lowering their contribution level or opting not to contribute to the plan at all. Of the employees offered a DC retirement plan in 2011, only 85 percent chose to participate in the plan (Munnell, 2015). Meaning only 32 percent of the U.S. workers participated in an employer-sponsored retirement plan in 2011 and 68 percent (two thirds) of the working age population did not participate in an employer-sponsored retirement plan because their employer didn’t offer it, they chose not to participate, they were in an excluded population, or they were not working (Munnell, 2015). The loss of traditional pensions combined with uncertainty regarding
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