Easing the Retirement Crisis
Two studies cast doubt, highlighting need for industry to lead the way.
Two studies cast doubt, highlighting need for industry to lead the way.
Many Americans face a scary prospect: surviving on much less money during retirement than they’re used to living on or not being able to afford a retirement at all. Every year, there are new reports about how many Americans are unprepared for retirement, with headlines like “42% of Americans Will Retire Broke” (Huddleston 2018) and “How 401(k)s Have Failed Most American Workers” (Morrissey 2016).
There’s sometimes debate among academics and researchers about the precise nature of the retirement-savings gap (Rhee 2013; Bee and Mitchell 2017; VanDerhei 2015). No matter how you slice it, however, nearly half of Americans have saved nothing for retirement, and the median 401(k) balance is less than $10,000 among working-age U.S. households that have saved something (Spiegel 2018; Grinstein-Weiss 2015). If that amount doesn’t change, people’s ability to comfortably retire is severely limited, and they’re highly dependent on Social Security remaining solvent. And many Americans are worried. In a recent EBRI survey, for example, only 17% of U.S. workers felt very confident in their ability to retire comfortably (EBRI 2018).