Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs, Federal Reserve Board, Washington, D.C. The Evolution of Retirement Wealth. Sebastian Devlin-Foltz, Alice M. Henriques, and John Sabelhaus. 2015-009

“Is the current mix of tax preferences for employer-sponsoredpensionsand individual retirementsaving in the U.S. delivering the best possible retirement-preparedness across and within generations? Using data from the triennial Survey of Consumer Finances for 1989 through 2013 , cohort-based analysis of life-cycle trajectories shows that (1) overall retirement plan participation was relatively stable or even rising through 2007, though participation fell noticeably in the wake of the Great Recession and has remained lower, (2) participation is strongly correlated with income, and the shift in the type of pension coverage occurred within—not just across—income groups, (3) relative to previous cohorts and a counterfactual lifecycle benchmark, the recentdecline inretirementplanparticipationanddefinedcontribution (DC)retirement account balance-to-income ratiosis concentrated among younger families and lower-income families.”