How Has the Shift to 401(k) Plans Affected Retirement Income?


The brief’s key findings are:

  • This analysis addresses how the transition from defined benefit to defined contribution plans affected retirement wealth and income during 1992-2010.
  • The results show:
    • total retirement wealth from employer plans was roughly flat, and this wealth is now more skewed toward those with more education;
    • the income produced by each dollar of retirement wealth has declined, despite a tendency for workers to retire later; and
    • the amount of income relative to a worker’s earnings has declined.
  • The bottom line is that employer plans are providing less retirement income today than in the past.

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