The Ever-Changing Nature of Retirement
Wausau WI Buska Retirement Solutions Ever-Changing Retirement

If it feels difficult to keep up with the things that change regarding retirement, you’re not alone. Even some very fundamental things about retirement have changed in the last 25 years.

Take, for instance, real Social Security benefits. Between 1975 and 1984, the Social Security Administration’s annual cost of-living adjustment averaged a healthy 7.7%.1 During that same time frame, the highest cost-of-living bump was 14.3%, unheard of by today’s standards.

This is the perfect example of how things have changed and can certainly throw a curveball into the retirement strategy of anyone who relies on Social Security — which is a lot of us. From 2009 through 2020, the average cost-of-living adjustment was just 1.38%.1 And, in three of those years, there was no cost-of-living adjustment. Accordingly, Social Security’s real-world purchasing power dropped a breathtaking 30% between 2000 and 2020.1

Another substantial change that has continued throughout the past 25 years is that more employers are transitioning from pensions to contribution accounts. Even just 25 years ago, pensions were still fairly common. But in the years since, there has been an acceleration in the shift away from pensions to contribution plans like 401(k)s and 403(b)s.

Additionally, many pension funds are seeking to buy out their beneficiaries. In this process, the pension fund seeks to provide one-time payments through a process called “de-risking.” The benefit for the pension fund is the aforementioned one-time payment, rather than lifetime payments.

While this is certainly a significant shift, many younger workers have access to employer-provided retirement accounts. And, if they don’t, they can work with a financial services professional to set up retirement income tools that simultaneously suit their current needs and their retirement goals. The shift from pensions to contribution accounts is another reminder that changes to retirement planning are inevitable.

But what about people who don’t have access to employer-provided retirement accounts? You may or may not be surprised to hear that number is lower than it was in the recent past. It’s estimated that over 40% of full-time millennial workers don’t have access to an employer-sponsored retirement plan.1 Some people might chalk that up to millennials being a younger generation — but the oldest millennials will turn 40 this year. An alternate explanation is that the rise of gig economy workers, who are generally contract employees and don’t have full benefits, is a significant contributing factor.1

Here’s where the changes of the past 25 years get even more concerning to some. Among the changes are fewer companies offering pension plans, fewer younger workers with access to employer-sponsored plans, and finally, fewer younger workers taking advantage of the employer-sponsored plans they do have access to. In fact, only 31% of millennials who have access to an employer-sponsored plan take advantage of it.1 Ultimately, whether you have access to an employer plan or you have to go it alone, it’s important to get rolling with a savings tool long before your retirement.

Many people could benefit from talking with a financial services professional to craft a strategy that adjusts for changes that have already happened and to prepare them for the changes that may be coming.


This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2019 Broadridge Investor Communication Solutions, Inc.

Advisory services are offered through Buska Wealth Management, LLC, a Registered Investment Advisor in the state of Wisconsin. Insurance products and services are offered through Buska Retirement Solutions, Inc., an affiliated company. Buska Retirement Solutions, Inc. and Buska Wealth Management, LLC are not affiliated or endorsed by the Social Security Administration or any government agency.

All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions.

The information contained herein is not an offer to sell or a solicitation of an offer to buy the securities, products or services mentioned, and no offers or sales will be made in jurisdictions in which the offer or sale of these securities, products or services is not qualified or otherwise exempt from regulation.

The information contained in this material have been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed.

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Buska Retirement Solutions

1818 Grand Avenue
Wausau, WI 54403
Phone: (715) 355-4445
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