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When thinking about how secure people are going to be in retirement, we tend to put a lot of emphasis on the shift from the old-fashioned defined benefit plan (where people receive a benefit for life based on final earnings and years of service) to 401(k) plans (where the employee, and usually the employer, contribute a percentage of earnings into an account). It’s easy to forget that, at any given moment in time, only about half of private-sector workers are covered by an employer-sponsored retirement plan of any sort (see Figure), whether it be a traditional pension, 401(k), or something else.
