Defined-contribution plans are growing and changing fast. The Associated Press reports the defined-contribution market is estimated to double in size by 2015 to $7.5 trillion to $8.5 trillion in assets under management. The information stems from a recent study by McKinsey & Co.
What does the news mean to consumers? The AP writes defined-contribution plans are fast evolving into a "linchpin" of Americans' retirement savings and offer increasingly innovative investment options. This is good news to consumers who are being forced to increasingly fund their own retirements as pensions vanish and Social Security funds shrink. And according to McKinsey, increased options bring a wider range of choices and more opportunities to obtain investment-related advice and invest in lower-fee funds.
What's more, the AP reports, the findings also defy belief that the defined-contribution market will decline when baby boomers retire.