Forget income inequality, retirement savings inequality might be the bigger issue (or at least income inequality in retirement).
“That being said, some are more prepared than others, and the wealthiest Americans have significantly more in savings,” the network notes.
According to the Economic Policy Institute, which looked at the state of American retirement saving, the top one percent of families had $1.08 million or more saved in 2013. That’s 216 times the median working-age family (50th percentile), which had only $5,000 saved in 2013.
The 90th percentile family had $274,000 saved, which is 55 times the total of the median American family. The 80th percentile family had $116,000, or 23 times the median family.
“Participation in retirement savings plans is highly unequal across income groups,” EPI said. “In 2013, nearly nine in 10 families in the top income fifth had retirement account savings, compared with fewer than one in 10 families in the bottom income fifth.”
The trends exhibited in these figures “paint a picture of increasingly inadequate savings and income for successive generations of Americans—and growing disparities by income, race, ethnicity, education, and marital status.”
It added that women, who by some measures are narrowing gaps with men, remain much more vulnerable due to lower lifetime earnings and longer life expectancies.
“Decades after the number of active participants in 401(k)-style plans edged out those in traditional pensions, 401(k)s are not delivering substantial income in retirement, and that income is not equally shared,” EPI concluded.
Thankfully, not all is lost, and CNBC says it’s only a matter of contributing, as many 401k advisors appreciate.
“One of the easiest ways to fund your future without feeling strapped is to have a portion of your paycheck sent directly to a retirement account, such as a 401(k) or IRA. That way, you’ll never even see the money and learn to live without it.”