Retirement Income: Ensuring Income throughout Retirement Requires Difficult Choices

Question: The shift from defined benefit to defined contribution plans has placed more responsibility for saving for retirement on individuals shoulders. GAO considered the pros and cons of various policy options to enhance retirement income security. Finding: Using the NIA-funded Health and Retirement Study, GAO found that: (a) retirees rely primarily on Social Security and pass up opportunities for increased retirement income; (b) few retirees choose the annuity option for receipt of their defined benefit pension income; (c) elderly appear to draw down their savings gradually. Options such as encouraging annuitization and improving financial literacy so that people are aware of their investment options and associated risks were discussed as ways to bolster retirement income security.