Investment - Articles - Generation Y - Impact on Retirement Planning 2025


Retirement provisions have seen major changes across the globe. Company sponsors and pension schemes' can no longer afford to pay the size of pensions promised to "Baby Boomers" and "Generation X." As a result, many countries are shifting from "DB" style pensions to "DC":

DB = Defined Benefit = Pension based on final-salary/average career earnings, often rising with rate of inflation. Investment risk is borne by pension scheme/sponsor rather than the individual.

DC = Defined Contribution = Pension based on an individual's contributions to their own retiement pot during their working life . Investment and inflation risk lies with individual members rather than scheme/sponsor.

 

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