The U.S. is facing a retirement crisis & not even high earners are immune

The country is facing a retirement crisis, but some Americans are worse off than others.

Workers in the top 20% of earnings distributions have half of all retirement wealth in both 1992 and 2010, compared with the bottom group, which saw its share fall from 3% to 1% between those years, a recent analysis at The New School’s Schwartz Center for Economic Policy Analysis (SCEPA) found. The share of workers in the bottom fifth of the earnings distribution with no retirement savings jumped from 45% to 51% in those 18 years.

The study looked at employees between 51 and 61 years old in 1992 and 51 to 56 years old in 2010 and divided their earnings based on lifetime labor market earnings, taking into consideration individual retirement accounts and employer-sponsored plans (like 401(k) plans). Survey findings were also matched with tax records and plan summary descriptions.

The findings reveal Americans, especially lower-income workers, nearing retirement are in dangerous territory. But some individuals within all types of lifetime earnings rates — high and low — are in trouble. In both 1992 and 2010, the top 10% of savers in each earnings distribution quintile had between 10 and 20 times as much in retirement assets as those in the bottom 10% of their groups. In the lower three quintiles of workers, the bottom 10% of each had nothing at all saved.

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