America’s crisis: 38 million have no retirement assets

00_CharleneCrowell01As more baby boomers continue to retire, a new research report has found that the nation is facing a trillion dollar retirement savings crisis. According to the National Institute on Retirement Security (NIRS), 38 million Americans – 45 percent of working-age households – have no retirement account assets.

“The heart of the issue consists of two problems: lack of access to retirement plans in and out of the workplace –particularly among low-income workers and families –and low retirement savings,” the report found.

No retirement plan
In 2011, according to the report, 44.5 million people worked for an employer that did not sponsor a retirement plan. Even among full-time employees, 35.2 million had no access to a retirement plan. Low-wage industries, regardless of size, were found to be the least likely to offer a retirement plan.

Today, the average working household has virtually no retirement savings. The median retirement balance for all working-age households is $3,000 and only $12,000 for those nearing retirement.

While some might assume that America’s workers make poor financial decisions, earlier research by the Center for Responsible Lending determined that the typical household has just $100 left each month after paying for basic expenses and debt payments.

Additionally, CRL found that income declines in communities of color are higher in part because of declines in over-representation in two types of employment that historically provided stable and secure jobs: manufacturing and construction.

The new NIRS report offered three specific actions to remedy the retirement crisis:

• Strengthen Social Security, the primary source of retirement income for low and middle-income Americans;

• Expand low- and middle-wage workers’ access to high-quality, low-cost retirement plans with professional investment management and risk pooling; and

• Expand eligible income limits and credit rates for the federal Saver’s Credit that reduces income tax liability by 10-15 percent on the first $2,000 in contributions to a qualified retirement account.

Without long-term solutions to the retirement crisis, NIRS concludes, “An increasingly dependent elder population will likely place increased strain on families and social service organizations. American workers, employers, and policymakers need to look closely at what we need to do individually and collectively, so that everyone can build sufficient assets to have adequate and secure income after a lifetime of work.”

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at



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