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.