Skip to: Content
Skip to: Site Navigation
Skip to: Search

November 22, 2008 10:42:27 CST

Learn about Newser Points »

« Back to the grid | Next story »

Many Retirees Will Have Less Than They Think

Posted Jun 16, 08 5:21 PM CDT in US 

(Newser) – Many employees will enter retirement with a much smaller income than they expect, the Economist reports. By 2014, the amount of money saved in direct-contribution retirement plans—ie 401Ks—will outpace than the amount saved in old-fashioned direct-benefit plans. But workers set contributions to their DC schemes at lower levels than might have been set aside in DC schemes.  Add poor investment decisions, and many pensioners could end up with half the retirement income they would’ve drawn under DB.

By moving away from a scheme that requires employers to guarantee set pension payouts, businesses have shifted the investment risk of retirement savings from themselves to their employees. DB is problematic because it turns firms into “quasi-hedge funds,” but companies also must educate their employees on their new responsibilities.

Source Economist

0 comments | Print E-mail | Digg Seed this on Newsvine Add this link to Del.icio.us StumbleUpon

Related Newser Stories

  • Sinking 401(k)s Raise Debate on How to Save

    Oct 12, 08 8:30 PM CDT
    Sinking 401(k)s Raise Debate on How to Save Tumbling stock markets have cracked open the piggy bank that many Americans use to store retirement savings—401(k) accounts—sparking fresh debate about how best to save money, the Washington Post reports. Supporters argue that 401(k)s offer bigger rewards than traditional pensions, which are less exposed to market turbulence. But they lose more on average too—between 7.2% and 11.2% over the last year.
    More »

  • Tough Times Ground Hedge Fund High-Fliers

    Sep 12, 08 12:41 PM CDT
    Tough Times Ground Hedge Fund High-Fliers The recent market turmoil has taken a good deal of the shine off of hedge funds, as managers are unable to reproduce their heretofore exemplary results in poor market conditions, the New York Times reports. The average hedge fund lost 4% this year, the worst overall results in the industry’s short history, and 2008 has seen some high-profile collapses.
    More »

Pensioners need to make sure they have money for the important things in life.   ((c) Brett L.)
Many pensioners may face retirement income well below their expectations.   (Shutterstock)
« Prev« Prev | Next »Next » Slideshow
Our editors also recommend:

Threads (
1
 of 3)

Tags

hedge fund • retirement • investment • income • pensions • employers • pension funds


Loading...

Premium Articles from HighBeam

Find more articles like this

Today's Most Popular

Loading...

Other US Stories

What is Newser?

2008 Codie Finalist

Face it: there's too much news. At Newser a team of editors and writers culls the most important stories from hundreds of U.S. and international sources and reduces them to a headline, picture, and two paragraphs. It's the Newser guarantee: we can take any report or column or video and pack what you need to know into 120 words or less. Newser's short-form aggregation, visual format, and unique information tools help you get more of the kind of news you want, in a quicker and more entertaining way. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »