Corporate Pension Plan Offerings Plummet While Defined Contribution Plans Skyrocket
According to a survey by consulting firm, Towers Watson, the proportion of Fortune 100 companies offering defined benefit plans fell from 67 percent to 17 percent from 1998 to 2010. During that same time, defined contribution plans increased from 10 percent to 58 percent. Companies have been moving towards defined contribution plans such as 401(k)s in order to cut their costs. Unless you have amazing luck investing, the defined contribution plans will deliver less income after you retire compared to the defined benefit plans, which are known as pensions and offer monthly income for life.
These unfortunate trends over the past two years have undoubtedly continued, which leaves the average worker with less financial protection as they approach retirement. This fact makes it even more important to get the most out of your hard earned money, so be sure to consult with a retirement income specialist to ensure that you have a sound financial plan as you approach retirement.
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