Broken Nest Eggs: The Retirement Savings Crisis in America

Last week, I had the opportunity to gather with businesses and non-profit leaders, academics, media members and other key stakeholders for a candid conversation about the retirement savings gap and how to ensure American workers have access to a secure retirement.

I’m particularly appreciative of the opportunity to gather with folks who are operating on the front lines to tackle a problem that millions of Americans are confronted with every year…the stark reality that they are NOT financially prepared for retirement. In fact, nearly 1 in 5 adults 50+ say they have nothing saved for retirement. And, of those that do have money set aside for retirement, nearly a quarter have less than $50,000 saved. This, in part, translates to nearly a quarter of adults 50+ saying they never expect to retire.

The conversation got me thinking even more about some of the factors that contribute to this complex problem. Here are a few:

1. Americans are living longer than ever before.

Someone at sixty can expect to live another 20-plus years thanks to advancements in medicine, public health and living standards. This is undeniably a wonderful development, but one that also puts extra onus on folks to stretch their savings for decades past typical retirement age. As a result, more than half (57%) of all non-retirees age 50-plus expect to work in retirement for financial reasons. Many older workers are turning to gig or independent work, which comes with more freedom and flexibility than a traditional full-time position. The most cited reason for deciding to work independently is to “make extra money.” For many older adults, the new word for retirement is WORK.

2. Lack of access to retirement savings accounts.

We know that workers are 15 times more likely to save if they have a means to do so at work, and 20 times more likely if that savings is automatic. Yet, nearly half of private sector employees do not have access to retirement saving plans at work. Disparities in access to savings plans become even greater when you consider other factors such as business size and educational attainment of employees. For example, nearly 8 in 10 workers in firms with fewer than 10 employees lack access to a savings plan. And, more than three in four workers with less than a high school degree don’t have an employer-provided retirement plan, a significantly higher percentage than those with a bachelor’s degree or higher (32 percent).

3. Many older adults' only source of income in retirement is Social Security.

42% of Americans age 65+, more than 22 million people, count on Social Security for at least half of their income, including more than 10 million for whom it makes up 90% or more. For older women, the numbers are even higher. 46% of all 65+ women rely on Social Security for at least half of their income, including 48% of African-American and 42% of Hispanic/Latina women.