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William J. Wiatrowski
O lder Americans may receive income from several sources, including Social Security, employer-provided pension plans, savings, and current earnings. The trend over the last several years has been toward increased availability of income from employer-provided pension plans. In 1988, 55 percent of households headed by persons aged 65 and older received some income from such plans. That number is projected to reach 88 percent by 2018.1 This increase is due in large part to the growing coverage of women by pension benefit plans. For example, the increase in the labor force participation of women in recent years, and the more widespread availability of survivor benefits for both men and women is likely to result in greater overall availability of pension benefits in the future.
The percent of total retirement income derived from employer pension plans is projected to increase much less dramatically, from 19 percent in 1988 to 25 percent in 2018. This apparent contradiction between the expanded coverage of future retirement income sources and the smaller expansion in the benefits they provide may be explained by decisions being made by today's work force. The worker's choice of employers, the decision to change jobs, or the decision to retire, may be made based on current circumstances, such as earnings, family obligations, or job satisfaction. Nonetheless, such decisions can affect both the availability and amount of future retirement income.
This excerpt is from an article published in the March 1993 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 For detailed information on sources of retirement
income, see Emily S. Andrews, "Gaps in Retirement Income
Adequacy," paper prepared for the Pension Research Council,
April 1992.
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