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Growing Inequality In Retirement Follows From Decades Of Wrongheaded Policies
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Growing Inequality In Retirement Follows From Decades Of Wrongheaded Policies

Author Christian E. Weller analyzes the growing inequality in retirement in the United States—a result of factors such as slow wage growth, high debt levels, and decades of inefficient retirement policies.

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. The gap between those who will be able to securely retire and in good health and those who struggle already exists and is likely going to grow. 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. Click here to view the full article.

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Christian E. Weller

Senior Fellow