The Role of Savings and Pension Systems in Maintaining Living Standards in Retirement

Over the years there has been a general recognition that serious economic problems have plagued and continue to plague the majority of aged persons in the U.S. and other countries. This article examines the personal savings rates required to provide an average worker with adequate retirement funds. The influence of (1) various definitions of adequacy, (2) inflation, and (3) economic growth on the magnitude of the retirement preparation task are examined. With this perspective, the current roles played by the social security system and private pensions are assessed.