12.14.2011 In the News, Policy Points

A Changing Retirement System

A recent report on the challenges facing Americans nearing retirement age featured the perspective of John Quinterno of South by North Strategies, Ltd.

John Quinterno of South by North Strategies, a Chapel Hill, N.C., consulting firm that studies the labor force, says the economic downturn exposed new risks in how Americans plan to support themselves in retirement. The country, he says, has switched from relying on the solid “three-legged stool” of pensions, Social Security and personal savings to a stool supported by Social Security and two wobbly legs, 401K funds and home equity.

“We’ve run an experiment where we’ve radically changed the system we used to finance retirements from more of a social insurance model to one where individuals are responsible for their retirement,” he says. “We’ve transferred the risk from institutions to individuals, and many folks are coming up on the wrong side of the situation.”

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