MADISON, Wis. (10/16/14)--Pre-retirees--those between 51 and 61 years of age--face a number of financial challenges as the retirement landscape undergoes a tectonic shift, with a resulting earthquake that threatens the well-being of working Americans, according to a new report from the Filene Research Institute.
Now, more than ever, everyday workers are on the hook for their own retirement planning, explains the report, "Financial Capability Near Retirement: A Profile of Pre-Retirees." In 1985, 4 out of 5 employees of mid-size and larger firms participated in a defined benefit or pension plan, while only 2 in 5 took advantage of a defined contribution plan such as a 401(k). Twenty-five years later, only 30% of employees were still in pension arrangements and more than half had defined contribution plans.
This unrelenting shift means that those approaching retirement increasingly must understand and plan for their own financial needs. By and large, they are not very good at it, the report said.
Among the report's findings:
Credit unions cannot single-handedly solve these problems, but as member-owned cooperatives they can play a crucial role in braking some of the trends that lead to poor planning and risky borrowing behaviors, the report said.
Among the recommendations the report makes:
To download the report, use the link.