Underlined the significance of employer-sponsored pension plans
In a data analysis that underscores the importance of employer-sponsored retirement plans, the Center for Retirement Research found that the lack of such coverage for private sector employees is “the primary reason US workers end up having inadequate retirement savings.” .
According to the report, only about half of private sector employees are covered by a defined benefit plan and / or a defined contribution plan, as opposed to the federal employment package, which includes both types for virtually all employees – the FERS or CSRS pension in the EU the former category and the TSP in the latter.
The percentage of people insured in the private sector has remained roughly unchanged over the past 20 years, but over that time there has been a shift from defined benefit to defined contribution plans, which has resulted in a shift in much of the financial plan obligation from employers towards the employee.
“Employees can be exposed in three ways: 1) Your employer doesn’t offer a plan. 2) their employer offers a plan, but they are not included; or 3) they are self-employed, “it said. “The first group makes up three quarters of all uncovered employees. Initiatives to close the coverage gap generally focus on extending coverage to the first group, but some also aim to ultimately include the other groups. “
It found that the federal government had launched several initiatives to expand reporting during this period, but that these programs were “based on voluntary participation by employers and therefore had little impact. . . Legislative proposals for binding programs are more the answer. “
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With a sufficiently long schedule that includes consistently high contributions and reasonable long-term stock returns over the period, it is possible to become a millionaire by putting together a middle or upper middle class income, including most federal service jobs.
FERS Retirement Guide 2021