Americans are worried about their retirement security. Many feel that they are inadequately prepared and research indicates that a growing number could be at risk of having to make substantial, painful cuts in their spending in retirement. . This is no accident, but the result of decades of wrongheaded policy decisions.
Retirement income inequality is already very large when considering differences between those who have a DB pension and those who do not and who instead rely more on their own savings. Recent retirees – those who retired within the last five years — with a DB pension received a median income of $60,673 (in 2016 dollars) from 2010 to 2016. In comparison, those without a DB pension had less than half – 49.2% — of that median income with $29,873. As fewer and fewer people have DB pensions and retirement savings accounts such as 401(k)s and IRAs become more widespread, retirement income inequality will likely only increase.
The above excerpt was originally published in Forbes.
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