Description: This essay explores the role that the emerging defined contribution retirement system may be playing in the growth of wealth inequality in the United States. The current system leaves many Americans with little or no retirement savings. Those with higher accumulation levels appear to invest proportionally more in equities, which may have an exponential effect of balances over long time periods. The author hypothesizes that willingness to take investment risk involves the relationship between the amount an investor has accumulated and what she/he needs in order to cover basic costs of living. This is one reason that investors with greater accumulation levels may be able to earn higher rates of return. The essay concludes by suggesting that the U.S. defined contribution system should include all workers and provide additional fiduciary guidance. Examples reforms, both in the U.S. and other countries, are provided.

Description: In this session, the following essays from the Society of Actuaries Living to 100 Call for Essays are presented. Essays: Potential for Mortality Improvement from Cognitive and Psychological Factors – Gordon Woo, – Ph. D. How Growing Inequality in the United States Makes Long-Term Care Financing Reform A Lot Harder – Karl Polzer – MPA Alcohol and Mortality, Sam Gutterman, FSA, CERA, FCA, FCA, HONFIA, MAAA

Description: This is one of eight essays from the collection: 2020 Living to 100 Essays.