Public sector defined benefit pension plans are based on final earnings, so those with long careers receive substantial benefits and those who leave early receive little. This pattern of back-loading could reflect an optimal design whereby plan sponsors want to attract and retain workers who...

Individuals save for decades to ensure that they will have financial security in retirement. That security can be threatened or eliminated virtually overnight if an individual who is in or near retirement becomes the victim of a financial fraud, such as a Ponzi scheme or sham investment in...

Pension discussions in the last few years have focused primarily on the financial health of state/local plans or on the shift from defined benefit to 401(k) plans in the private sector. Often forgotten is that while coverage at the state/local level is virtually universal, only 42 percent of...

A key challenge many households entering retire-ment face is how to use their savings as a source of income. As 401(k)s replace traditional defined benefit pensions and as Social Security replaces a smaller share of household pre-retirement earnings, draw-ing an income from savings becomes...

Workers under age 35 have the lowest 401(k) participation of any age group. Failing to save for retirement at a young age means missing out on compounded investment earnings that can substantially ease the burden of building a nest egg. The reasons young workers save less for retirement range...

Tax reform is high on the nation’s agenda. While Re­publicans and Democrats may disagree about the ex­tent to which tax increases should be part of the defi­cit reduction effort, they generally agree that a broader base and lower rates for the federal income tax would promote fairness and...

The National Retirement Risk Index (NRRI) measures the share of American households “at risk” of being unable to maintain their pre-retirement standard of living in retirement. The NRRI is determined by comparing households’ projected replacement rates – retirement income as a percentage...

Policymakers have designed Social Security to be a progressive retirement program that replaces a larger share of monthly earnings for low- and middle-income workers than for high earners. However, previous research has found that, although the Disability Insurance (DI) component of Social...

State and local government pension reform has become a front-burner issue in the wake of the economic crisis, which sharply reduced funded ratios for most plans. Policymakers have responded primarily by raising employee contributions for all workers and/or reducing benefits for new workers. One...

People often ask how baby boomers compare with their parents in terms of being prepared for retirement. The easiest way to answer that question is to look at the ratio of wealth to income from the 2010 Survey of Consumer Finances (SCF), the Federal Reserve’s comprehensive triennial survey of...