Us Retirement Income System

Abstract

In the United States, retirement income is supplied through the combination of a relatively modest, contributory social insurance programme; employer-provided (increasingly defined contribution savings) programmes; and individual retirement savings. The public programme supplies the vast majority of the income of the poorer half of the aged population; only the richest 20 per cent receive more from employer plans than from the public programme. Projections show that the public programme will have financial problems in the 2030s. Thereafter, revenues would have to be increased by a third or benefits cut by a quarter to restore financial balance. Despite widespread angst about the impact of longer lifespans and the retirement of the baby-boom generation, however, there is little serious discussion about how either the public- or private-sector programmes should be adjusted. In 2005, President Bush failed to generate significant public support for a plan partially to privatize the public-sector programme.