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GAO: Those Approaching Retirement Lack Savings
News from the U.S. Government Accountability Office isn’t too positive for Americans approaching retirement. In an update to the 2015 report, “Retirement Security: Most Households Approaching Retirement Have Low Savings,” the GAO noted that 48% of those age 55 years and older have nothing put away in a 401(k) defined contribution plan or individual retirement account. On the positive side, however, the estimate, taking into account 2016 figures, represented an improvement over the 52% without retirement funds reported in 2013.
The GAO estimate provided a brief update to a comprehensive 2015 report on retirement savings in the U.S. Both were based on the Federal Reserve’s Survey of Consumer Finances. The update provided the following additional information, as well.
- Two in five of retirement households had access to a traditional pension, also known as a defined benefit plan.
- Twenty-nine percent of older Americans had neither a pension plan or assets in a 401(k) or IRA account.
- Among those with retirement savings, the median amount was $104,000 for households age 55-64, and $148,000 for households age 65-74. This is equivalent to an inflation-protected annuity of $310 and $649 per month, respectively.
- Social Security provides most of the income for about half of households age 65 and older.
Meanwhile, a report issued in early March 2019 by the Employee Benefit Research Institute, estimated that 41% of U.S. households headed by someone ages 35-64 are likely to run out of money in retirement, with those Americans facing a combined retirement deficit of $3.83 trillion.
For comments, questions or concerns, please contact Amy Sorter
- ◦Economy
