The Economic Policy Institute’s “The State of American Retirement” combined with the National Institute on Retirement Security‘s new report on women and retirement paint a very clear picture of a nation on the brink of an economic crisis that will devastate millions of average American families, if Washington continues to turn a blind eye.
The median family between the ages of 32 and 61 has only $5,000 saved in a retirement account, while the top 1 percent of families has a million dollars or more. For many groups—lower-income, black, Hispanic, non-college-educated, and unmarried—the typical working-age family has no savings at all in these accounts….The State of American Retirement.
“Our retirement system used to reduce inequality, but since the shift to 401(k)s it has only served to magnify it. These accounts are accidents of history that were never designed to replace pensions, and it should come as no surprise that they have not worked for the majority of people.” …Monique Morrissey, EPI Economist
The numbers are stark:
- Nearly half of all working-age families have zero retirement savings.
- Almost nine in 10 families in the top income fifth have savings in retirement accounts, compared to fewer than one in 10 families in the bottom income fifth.
- Only 41 percent of black families and 26 percent of Hispanic families have retirement account savings, compared with 65 percent of white non-Hispanic families.
- Only married couples are more likely than not to have retirement account savings.
News that the income inequality hindering American workers now is also carrying over to their retirement is alarming for future generations who are taking an economic hit at every stage of life. For women, the retirement picture is even worse.
“A new analysis finds that women are 80% likely than men to be impoverished in retirement. The National Institute on Retirement Security (NIRS) finds that across all age groups, women have substantially less income in retirement than men. For women age 65 and older, the data indicate that their typical income is 25 percent lower than men. As men and women age, men’s income advantage widens to 44 percent by age 80 and older. Consequently, women were 80 percent more likely than men to be impoverished at age 65 and older, while women age 75 to 79 were three times more likely to fall below the poverty level as compared to their male counterparts.”… National Institute on Retirement Security
Just as we’ve seen from climate change deniers, many Republican politicians won’t even acknowledge the retirement crisis exists because improving the nation’s most successful federal retirement programs is anathema to their misguided belief that Wall Street should be handling your savings and for-profit insurance companies managing your health. Instead of supporting proposals to improve the backbone of America’s retirement system, Social Security and Medicare, conservatives continue their campaign to privatize and cut.
There are legislative proposals which would improve Americans’ retirement picture but they are languishing in the GOP controlled Congress. You can see many of these proposals on our Legislative tracker. We also continue to advocate for meaning changes impacting retirement security for women. Please take a moment and see those details on our Eleanor’s Hope initiative website.