The report, “Are U.S. Workers Ready for Retirement?” identifies the share of people whose projected income in retirement will be below poverty across states. This message of downward mobility is important both to individuals whose retirement institutions are failing them and policy makers who will inherit the impact of increasing poverty on both social welfare and municipal budgets.
Poverty As a Result of Little to No Retirement Savings
- 33% of current workers aged 55 to 64 are likely to be poor or near-poor (less than 200% FPL) in retirement based on their current levels of retirement savings and total assets.
- 55% of retirees will be forced to rely solely on their Social Security income.
- Some states are worse off than others. 41% of near-retirement workers in Florida may experience poverty or near-poverty in retirement, followed by North Carolina and Texas.
The Failure of Retirement Savings Vehicles
- Almost half of Americans who were working in 2011 were not offered a retirement account at work.
- 68% of the U.S. working age population (25-64) did not participate in an employer-sponsored retirement plan because their employer did not offer one, they elected not to participate or were not working.
- The amounts saved through employer-sponsored defined contribution (DC) retirement plans are only slightly better off than those without a retirement plan.
Authors: Teresa Ghilarducci, Joelle Saad-Lessler and Kate Bahn