The 401(k) is wreaking havoc on retirement

The shift from pensions to 401(k) plans is making retirement inequality much worse — and education is what separates the haves from the have-nots, a new study has found.

That shift is creating “double disadvantages for the less educated,” wrote University of Kansas sociology professor Chang Hwan Kim and U.S. Social Security Administration researcher Christopher Tamborini in a paper presented at the American Sociological Association’s annual conference on Tuesday.

College graduates have always been able to get better jobs. What’s new in recent decades is that traditional pensions have all but vanished, replaced by 401(k)-style plans.

In 1980, 38 percent of private sector workers had a pension and 19 percent a 401(k). By last year, according to the U.S. Department of Labor, the numbers had more or less reversed — just 15 percent had a pension and 43 percent a 401(k).

Read more: Bloomberg

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