Some Retirees' Nest Eggs Appear To Have Cracks
Dow Jones Newswires</br></br>The shift away from defined-benefit plans is putting more responsibility on workers to pad their own nest eggs, but so far, at least one-fifth of new retirees appears to be faltering under the burden.</br></br>This finding, from a report released last week by the nonpartisan Employee Benefit Research Institute, comes at a time when President Bush is pushing to allow workers to divert a portion of their Social Security payroll taxes into private accounts, making investors even more accountable for their retirement savings.</br></br>Employers, in recent years, have stepped up their efforts to get workers into 401(k) plans amid the changing retirement-plan landscape and the uncertainty of Social Security. Still, nearly a third of eligible workers aren't participating in their company's 401(k) plan, and of those who do, many aren't putting away enough to make it through their retirement years, according to Hewitt Associates, a global outsourcing and consulting firm in Lincolnshire, Ill.</br></br>These savings patterns, if they don't change, will wreak havoc on nest eggs. Already, among 15% of new retirees -- many of whom had defined-benefit plans for at least part of their career -- total wealth fell by at least 50% from 1992 to 2002. An even greater number, about a fifth, of this group are in danger of running out of money during retirement. Still, the majority of those born in 1931 to 1941, individuals who are now 64 to 74 years old, saw their total wealth grow by 50% or more during this 10-year period.