Despite the uncertainties about retirement funding created by companies' migration away from defined benefit pension plans and the proposal to partially privatize Social Security, many workers eligible to save for retirement in company-sponsored 401(k) plans do not do so, according to Hewitt Associates.
The outsourcing and consulting company in Lincolnshire, Ill., said nearly one-third of eligible workers are not participating in their companies' plans. And of those who do participate, many do not save enough to fund their livelihood during retirement, Hewitt said.
About one-fifth of recent retirees - a group that includes many who had defined benefit plans for at least part of their working lives - are in danger of running out of money during their retirement, according to a report last week by the Employee Benefit Research Institute. For 15% of the recent retirees, total wealth had fallen at least 50% from 1992 to 2002, it said.
