The Changing Nature of Retirement

The calls for Social Security reform have dimmed. With today's retirees doing relatively well, there hasn't been much sense of urgency. After all, the forecasted red ink is still years in the future.

But there are some very important trends taking place in retirement that impact tomorrow's retirees, foremost of which is the steady disappearance of corporate pension plans.

Since 1985, the number of defined benefit plans insured by the U.S. Pension Benefit Guaranty Corporation has declined from 114,500 to less than 31,000 in 2005, covering only 20% of the private sector workforce.¹

Responsibility for accumulating and investing retirement assets is moving from the institution to the individual. Defined contribution plans (401k, 403b plans and others) surged from 159,000 in 1985 to 628,000 in 2004.

Along with the change in responsibility have come longer life spans. Americans now 65 years of age can expect to live an average of 18.7 more years (17.1 for men; 20 more years for women).

Longer lives inevitably mean the need for greater retirement savings and that's where the outlook for future retirees begins to fall apart. In addition to low personal savings rates, individual investors tend to underperform the traditional retirement fund managers — institutions and corporate pension plans.

Part of the problem can be summed up in a statement by Warren Buffett in an interview on CNBC, "Investing is simple, but not easy."

Professional management has the potential to make a substantial difference in the quality of your retirement.

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Dearborn & Creggs Can Help

Your Dearborn & Creggs financial representative welcomes the opportunity to explain our management approaches and investment results with you and with individuals you refer to our firm. Our goal is, as always, to help you retire in comfort to enjoy the years you have worked so hard to reach.