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FIGURE 7.2 The increasing risk of having insufficient money during retirement Share of working-age households at risk of not having enough money to maintain their standard of living over time 60% 50% 53% 52% 40% 30% 31% 31% 30% 37% 38% 40% 38% 45% 44% 20% 10% 0% 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 Source: Alicia H. Munnell, Wenliang Hou, and Anthony Webb, "NRRI Update Shows Half Still Falling Short" (Chestnut Hill, MA: Center for Retirement Research at Boston College, 2014), available at http://crr.bc.edu/briefs/nrri-update-shows-half-still-falling-short/. Participation in workplace retirement plans has fallen since 2001, making it even harder for workers to build up the assets necessary to maintain their standard of living in retirement. 14 And too many Americans who do have the resources to save face high fees in their retirement accounts that make it difficult to build up assets. 15 While fees may look small on paper—if savers notice them at all—previous CAP research has shown that even a 0.75 percentage point difference in annual fees can cost a typical worker almost $100,000 in his or her lifetime. 16 Until recently, many workers risked paying high fees because not all retirement advisers were required to act in their clients’ best interest. 17 Instead, advisers could direct savers to more expensive funds that padded their profit margins, which led to savers losing an estimated $17 billion each year. 18 While those without an employer-provided account have the option of seeking out and saving in an individual retirement account, or IRA, the vast majority do not. 19 As a result, the overall picture is bleak: Nearly one-third of nonretired Americans have no retirement savings or pension at all. 20 The median household nearing retirement, or age 55 to 64, with retirement savings has saved just $104,000—only enough to afford a $400 monthly payment from a lifetime annuity and well below what a typical household would need in retirement. 21 Factoring in households who lack accounts altogether, the median near-retirement household has only $14,500 saved for retirement. 22 136 Center for American Progress | Raising Wages and Rebuilding Wealth
FIGURE 7.3 Middle class households are far less likely to have retirement savings than wealthy households Share of families ages 32 to 61 with savings in retirement accounts, by income group 100% Top 20 percent 80% 60% 40% Middle 60 percent 1995 1998 2001 2004 2007 2010 2013 Note: Retirement accounts include 401(k)s, individual retirement accounts, and Keogh plans; Families include single/no kids households. Ages for families are based on the male in a mixed-sex couple or the older spouse in same-sex couple. Source: Author's calculations based on Monique Morrissey, "The State of American Retirement: How 401(k)s have failed most American workers" (Washington: Economic Policy Institute, 2016), available at http://www.epi.org/publication/retirement-in-america/. These figures reflect the reality that, too often, middle-class Americans are not able to save for retirement in the same way as their wealthier peers. Eighty-eight percent of households age 32 to 61 in the top income quintile had a retirement account in 2013—virtually unchanged from 89 percent in 2001—compared to only 52 percent of middle-class households, down from 56 percent in 2001. 23 And wealthy households have by far the most assets in these accounts: The top 20 percent of households hold 74 percent of total retirement account savings, while the middle 60 percent hold the other 26 percent. 24 Younger Americans are faring worse than their older counterparts. In 2014, a majority of American households age 18 to 29 had no retirement savings or pensions. Among households age 30 to 44, about 3 out of 10 have no retirement savings or pension. 25 The Center for Retirement Research’s estimates that 45 percent of households age 50 to 59 are at risk of failing to meet their living standard in retirement; among younger households age 30 to 39, an even higher proportion—59 percent— are already at risk. There is also reason to believe that rising student debt levels may crowd out retirement savings and harm retirement readiness among younger generations. If today’s households had the same amount of debt as do new college graduates, an additional 4.6 percent of households would be at risk. 26 Retirement | www.americanprogress.org 137
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AGENCY/PHOTOGRAPHER Raising Wages a
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Contents 1 Introduction and summary
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CHAPTER 1 Introduction and summary
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Nevertheless, public policy can and
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of growth came to an end. Middle-cl
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The main reason middle-class income
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The above analysis of incomes focus
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TABLE 1.2 Wealth across demographic
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FIGURE 1.6 The cost of education, h
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Policy response and recommendations
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• Address the labor market effect
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Health care • Address cost shifti
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Endnotes 1 Authors’ analysis of M
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Introduction and summary | www.amer
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CHAPTER 2 Jobs and Wages By Michael
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One of the most striking aspects of
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In sum, these five factors leave ma
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ments to open production sites in l
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The deterioration of other regulato
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ate returned to its 2001 level. The
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This speaks to a larger challenge t
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Underinvestment produces chronic ro
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sidized jobs program that would hel
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Restore worker bargaining power We
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Rebuild labor standards and the bro
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Additional steps should also be tak
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Policymakers should work with stake
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At the same time, we can take actio
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Endnotes 1 Authors’ analysis of C
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52 Charles Whalen and Felix Reichli
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96 Julia Gordon, “Inequality, Opp
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prehensive immigration reform. Pass
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An Immigration Policy that Works fo
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CHAPTER 3 Early Childhood By Katie
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Due to these high costs, parents ar
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information available to parents. 2
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Policy recommendations Two new poli
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Endnotes 1 Annie E. Casey Foundatio
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Early Childhood | www.americanprogr
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CHAPTER 4 Higher Education By Ben M
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FIGURE 4.1 Average tuition and requ
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FIGURE 4.3 Net price of public four
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Policy recommendations Increasing h
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Endnotes 1 Bureau of Labor Statisti
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Page 93 and 94: LGBT People Face Significant Barrie
Page 95 and 96: CHAPTER 5 Health Care By Maura Cals
Page 97 and 98: Health care benefits are part of a
Page 99 and 100: When combined, these trends meant t
Page 101 and 102: Policy recommendations The ACA made
Page 103 and 104: The notice should outline how much
Page 105 and 106: Require drug companies to justify p
Page 107 and 108: Endnotes 1 Mark W. Stanton, “Empl
Page 109 and 110: Health Care | www.americanprogress.
Page 111 and 112: Workers with disabilities are also
Page 113 and 114: with disabilities, child care provi
Page 115 and 116: 23 Faye Ong, ed., Inclusion Works!
Page 117 and 118: CHAPTER 6 Housing By Sarah Edelman
Page 119 and 120: FIGURE 6.1 Homeownership rate 75% 7
Page 121 and 122: middle-class households: The share
Page 123 and 124: Homebuyers in the coming decade may
Page 125 and 126: Support and expand low down payment
Page 127 and 128: Changes such as these have faced pu
Page 129 and 130: for lots and rules against construc
Page 131 and 132: 20 Ibid. 21 Joint Center for Housin
Page 133 and 134: 63 CAP published a report in Decemb
Page 135 and 136: African American and Latino workers
Page 137 and 138: Endnotes 1 Due to a lack of disaggr
Page 139 and 140: CHAPTER 7 Retirement By David Madla
Page 141: FIGURE 7.1 Households are not build
Page 145 and 146: The federal government plays a larg
Page 147 and 148: Modernize survivorship and divorce
Page 149 and 150: Fully implement the conflict of int
Page 151 and 152: 27 Christian E. Weller and David Ma
Page 153 and 154: Retirement | www.americanprogress.o
Page 155 and 156: CHAPTER 8 Conclusion By Brendan Duk
Page 157 and 158: The country will elect a new presid
Page 159 and 160: Conclusion | www.americanprogress.o
Page 161 and 162: Thomas Huelskoetter is the Research
Page 163 and 164: Acknowledgements The authors would
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