BLS reports that in 1987, 86.1% of private employers’ retirement-benefit spending went to defined-benefit plans and 13.9% to defined-contribution plans. By 2022, the shares had reversed: 29.4% went to defined-benefit plans and 70.6% to defi
A defined-benefit pension promises a formula-based retirement benefit and generally leaves the employer responsible for funding promised benefits. A defined-contribution plan such as a 401(k) promises no specific retirement benefit; the wor
Congress added section 401(k) to the Internal Revenue Code in the Revenue Act of 1978. The IRS published regulations for section 401(k) in 1981, and the first 401(k) plans were established soon afterward. The provision allowed employees to
In March 2025, 14% of private-industry workers had access to a defined-benefit retirement plan, while 70% had access to a defined-contribution plan. Defined-benefit plans promise a formula-based benefit; defined-contribution plans build ind
Among private-industry workers in March 2025, 78% of full-time workers had access to defined-contribution retirement plans versus 43% of part-time workers. Healthcare access was 87% for full-time workers and 27% for part-time workers. Paid
In March 2025, only 38% of private-industry workers in the lowest 10% wage category had access to an employer retirement plan, compared with 93% of workers in the highest 10% wage category. Participation was 15% versus 83%.
The Social Security Amendments of 1983 gradually raised the age for unreduced retirement benefits from 65 to 67. The change applies fully to workers born after 1959, whose full retirement age is 67.
The 1983 Social Security amendments retained the ability to claim reduced retirement benefits at age 62 while raising full retirement age to 67. For workers whose full retirement age is 67, claiming at 62 can produce a permanent reduction o
Before the Social Security Amendments of 1983, Social Security benefits were generally excluded from federal income taxation. The 1983 law made up to 50% of benefits potentially taxable for beneficiaries whose combined income exceeded statu
GAO’s analysis of 2022 Survey of Consumer Finances data found that about half of households with a worker age 55 or older had no retirement savings. GAO defines retirement savings to include defined-contribution accounts such as 401(k)s and
