Slide 22 of 38
Notes:
Based on our best guess, only 40% of NC boomers will have pensions for retirement. The trend toward “outsourcing” may result in some of them losing their expected pension and health benefits.
For those who do have pension coverage, its sponsorship is changing--that is, fewer employers are offering defined-benefit programs, which usually pay based on years of service and highest salary. Employers are moving toward defined-contribution programs, where employees contribute to a pension fund, often in pretax dollars and matched by employer. Defined-benefit pensions usually provide pensions for life, but defined-contribution programs pay until saved funds are expended. Neither type of pension typically adjusts for inflation.
While home ownership is the primary large asset for many of today’s seniors, home equity may not be a windfall for boomers. Boomers are less likely to own a house, especially younger boomers, and they may flood the market and drive down prices when they sell.
While there are positive signs of increased interest and participation among boomers in investments, national information from 1991 suggests there is much more to do. About 1 in 4 of those age 45–54 had stocks and mutual fund shares. Less than a third had an IRA or KEOUGH account, and this was true of only about a quarter of those age 35–44.
With limited assets, the absence of a pension, and an uncertain future for Social Security, an increasing number may look to keep working or reenter the workforce.
The future is especially dim for those with limited education, located in depressed areas of job growth, and burdened with the responsibility of just trying to make ends meet today.
