According to a report by the National Institute for Retirement Security (NIRS), as reported by Newsweek, the median retirement savings among people with defined contribution plans was $40,000 in December 2022. hole.
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However, when all workers are included – including those who have no savings – this median drops to just $955.
What's worse, as NIRS points out, the problem is not only the low level of savings, but also their fragility. JOne fourth of saving Americans admitted, as we read in a Northwestern Mutual study, that their financial reserves cover a maximum of one year's income.
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This means that unforeseen events such as job loss, health problems or economic turmoil can quickly ruin your plans for a peaceful retirement.
The myth of the “three-legged stool”
For decades pension policy in the USA is based on the concept of the so-called three-legged stool, That is a combination of social security, occupational pensions and individual savings. However, in practice this structure is rare.
NIRS data show that less than 7 percent older, non-working adults in the U.S. benefit from income from all three sources. Although almost all employees pay social security contributions only half participate in employer-sponsored retirement plans, and individual savings remain low.
This translates into the amount of benefits and the quality of life that Americans can enjoy in old age. This is getting worse every year, as can be seen from the poverty rates.
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NIRS data show that in By 2024, the share of older people living in poverty increased to 15%, up from 14%. a year earlier.
