We have a situation that may sound like bad luck, but it’s a reality for many older Americans. About 1 in 5 people over 50 have no retirement savings at all, according to the AARP.
This decline underscores a widening retirement savings gap between high- and low-income households. While 90% of high-income households had a retirement account balance in both 2007 and 2019, the share for low-income households was cut in half over that period
Several factors contribute to this crisis:
- Everyday expenses and rising costs of living make it difficult for many to save
- Many low-wage workers lack access to employer-sponsored retirement plans; less than half are eligible, and only about a third of eligible workers actually participate
- Among low-wage workers, nearly 40% have no retirement savings at all, and even those who do have modest balances—only about 20% have more than $50,000 saved
- A significant portion of older adults expect never to retire, with about 25% of those over 50 saying they may work indefinitely due to financial necessity
I am aware of business owners who have deleted their reserves, some to save their businesses, some for medical issues, some just for not planning ahead well enough. When do we actually have enough saved, I see cost rising for my senior clients, some express their concerns for keeping their homes.