The U.S. retirement savings crisis continues to worsen and the typical working household still has virtually no retirement savings, finds a National Institute on Retirement Security (NIRS) report.
The report, The Continuing Retirement Savings Crisis, says when all households are included—not just households with retirement accounts—the median retirement account balance is US$2,500.
The median retirement account balance was US$3,000 for all working-age households as reported in a previous 2013 report.
For near-retirement households, the new analysis finds that the median retirement account balance is US$14,500. Also, some 62% of working households age 55 to 64 have retirement savings less than one times their annual income, which is far below what Americans need to be self-sufficient in retirement.
The report also finds nearly 40 million working-age households (45%) don’t own any retirement account assets, whether in an employer-sponsored 401(k) type plan or an individual retirement account.
Even after counting households’ entire net worth, 66% of working families fall short of conservative retirement savings targets for their age and income based on working until age 67.
“Two problems are at heart of the issue: lack of access to retirement plans—particularly among low-income workers and families—and low levels of retirement savings,” says NIRS executive director Diane Oakley. “These twin challenges amount to a severe retirement crisis that if left unaddressed will result in grave consequences for the U.S. economy and families.”