As of November 2021, only 15 percent of private industry workers had access to a defined benefit pension from their employer. Why is that disheartening? A pension guarantees a steady income once you retire.
Meanwhile, more options are being offered to workers to save for retirement. As of 2021, 81 percent of private-sector employees had access to employer-sponsored retirement plans, such as 401(k). Furthermore, studies show that employers are looking to enhance their defined contribution (DC) retirement plans in an effort to increase employee security, financial well-being, and retention.
In contrast, a Morgan Stanley at Work study found that 62 percent of employees cut back on short—and long-term savings contributions in the face of high inflation. To make matters worse, there is a great deal of uncertainty surrounding Social Security’s future. A Social Security Board report issued in 2021 predicted that the agency’s cash reserves would be exhausted by 2034—one year sooner than their 2020 report anticipated….