StateTrust wants its clients to be aware of the need for a personal retirement plan. Without a personal retirement plan, clients will be dependent on pensions and government programs, such as Social Security, to fund their retirement needs.
Traditional defined-benefit pension plans offered by corporations are severely underfunded. Similarly, actuarial projections have determined that without an increase in taxes or benefit reductions, Social Security will face a funding crisis within the next 25 years.
The graphic below shows the sharp decline in the number of defined benefit pension plans since 1975.
Many companies have replaced the traditional defined benefit pension plans that provide income for life with a defined contribution plan. This change shifts the burden of saving for retirement from the employer to the employee.
Links of interest: