Rebuilding the Retirement Dream

Ahh, retirement—so many possibilities, so little time! Turns out that for millions of Americans the dream of a secure retirement was just a dream. From 2007 to 2008, total retirement wealth in private and public sector pension plans and retirement savings plans dropped by $2.8 trillion (in 2008 dollars).

Not all retirement plans are created equal, though. Data from the Fed show that holding gains and losses—changes in asset values minus contributions—relative to initial asset values tend to be higher for traditional pension plans than for retirement savings plans, such as 401(k) plans. Holding gains are typically used as an approximation of rates of return for these data.

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