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America's $4 Trillion Retirement Gap

About half of Americans are financially on track for retirement, but the other half are falling well short.

America has a stunningly large $4 trillion retirement-savings gap. That is a big number. But that may not even be the worst news: Like much of American society, retirement preparedness is separated into the have and the have-nots, with the latter facing long odds to achieve anything resembling a decent retirement.

First the overall numbers: The estimated $4 trillion deficit (actually $4.13 trillion) comes courtesy of the thoughtful researchers at the Employee Benefit Research Institute. EBRI has actual account data for 24 million 401(k) participants and 20 million IRA holders, and thus is in a better position than just about anyone to estimate the size of the American retirement-savings gap. EBRI's sophisticated projections contain estimates for a variety of complicated variables, ranging from future defined-benefit income and Social Security proceeds to net housing equity and potential in-retirement medical costs.