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Living in poverty is a very real prospect for a third of Americans aged 55-65 who have no retirement savings, writes Javier Simon for Plan Sponsor.
Citing a study from the Schwartz Center for Economic Policy Analysis, he writes that “income from retirement savings would replace a median 14 per cent of pre-retirement income for these workers, which the organization says is inefficient to maintain pre-retirement living standards.”
Workers with DB plans are better prepared for retirement, according to the study.
“The median account balance for workers with at least a DC plan and earning less than $40,000 a year is $35,000. But even among the top 10 per cent of earners, that rate is only $250,000.”
The study continues that without “retirement savings, workers below median income will be almost entirely dependent on Social Security and will be at high risk of not only downward mobility in retirement, but also falling into poverty.”
More: Study sheds light on “underserved portion of the market.”

ARIA provides a forum for an informed discussion on retirement income adequacy, and other related issues, including pension and retirement coverage, and defined benefit pension plans – ARIA pensions blog, 12 Dunlop Street, Barrie, ON, L4N 1V6 – sitemanager@ariapensions.ca

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