As the world of defined contribution retirement savings has grown, and with the potential vast expansion of private retirement savings through automatic IRAs, the majority of savers now nearing retirement and in the generations to come will have nest eggs, which they will have primary responsibility for managing during retirement. Providing Americans the tools to manage the risk of outliving one’s savings in retirement will be a major challenge of the 21st century.
This white paper is is intended to describe how U.S. retirement policy arrived at this crossroad and to highlight some of the tensions and past choices that have brought the system to this turning point. The paper focuses on three areas of inquiry regarding the challenge of longevity at this point in time: employer plans, people and industry products. Understanding the journey the defined contribution plan system has made to this point in time is the first step toward charting its direction for the future.