RESUMEN
The 2008 stock market crash raises concerns about retirement security, especially since the increased prevalence of 401(k) and similar retirement saving plans means that more Americans are now stakeholders in the equity market than in the past. Using a dynamic microsimulation model, this paper explores the ability of alternate future stock market scenarios to restore retirement assets. The authors find that those near retirement could fare the worst because they have no time to recoup their losses. Mid-career workers could fare better because they have more time to rebuild their wealth. They may even gain income if they buy stocks at low prices and get above-average rates of return. High-income groups will be the most affected because they are most likely to have financial assets and to be invested in the stock market.
Asunto(s)
Financiación Personal/estadística & datos numéricos , Renta/estadística & datos numéricos , Inversiones en Salud/estadística & datos numéricos , Jubilación/economía , Seguridad Social/estadística & datos numéricos , Contabilidad , Anciano , Financiación Personal/tendencias , Predicción , Humanos , Renta/tendencias , Inversiones en Salud/tendencias , Persona de Mediana Edad , Modelos Económicos , Jubilación/tendencias , Salarios y Beneficios/estadística & datos numéricos , Seguridad Social/tendencias , Estados UnidosRESUMEN
This article uses a microsimulation model to estimate how freezing all remaining private-sector and one-third of all public-sector defined benefit (DB) pension plans over the next 5 years would affect retirement incomes of baby boomers. If frozen plans were supplemented with new or enhanced defined contribution (DC) retirement plans, there would be more losers than winners, and average family incomes would decline. The decline in family income would be much larger for last-wave boomers born from 1961 through 1965 than for those born from 1946 through 1950, because younger boomers are more likely to have their DB pensions frozen with relatively little job tenure. Higher DC accruals would raise retirement incomes for some families by more than their lost DB benefits. But about 26 percent of last-wave boomers would have lower family incomes at age 67, and only 11 percent would see their income increase.