It’s well-known that low-income working Americans struggle to save for retirement and have less retirement income than middle-class and wealthy Americans. It shouldn’t be this difficult. The main goal in retirement planning is to achieve what the experts call an income replacement rate. For example, the goal of a worker should be to save enough money to replace 75 percent of their working income in retirement. It doesn’t matter if that worker earns $30,000 per year or $300,000 per year- 75 percent is 75 percent. However, many working families, especially low-income ones, fail to achieve this replacement rate. There are a variety of reasons why low-income workers struggle to save enough for a secure retirement. Let’s examine a few of them.

One of the biggest problems facing low-income workers is lack of access to a retirement savings plan. Many low-income workers do not have access to a retirement savings plan through their employer. This has a direct and significant impact on their ability to save for retirement. If workers do not have a vehicle through which to save, then saving is almost impossible. Related to this, employer contributions to retirement accounts have a major effect on the savings of low-income workers. This is good, if employers contribute; however, it also means low-income workers are very dependent on these contributions.

According to a recent study, low-income workers encounter multiple obstacles throughout the course of their careers that harm their ability to save enough for retirement. These obstacles include periods of unemployment, earnings declines during their careers, and small employer contributions toward retirement accounts. These are obstacles rarely faced by wealthier Americans. Each of these obstacles lessens the amount that workers have saved in their 401(k) accounts.

Another reason many low-income workers fall behind in retirement savings is having to rely on their 401(k) accounts to cover emergency spending. A widely discussed survey by the Federal Reserve in 2016 found that almost half of Americans don’t have enough money set aside to cover an unexpected $400 expense. When faced with these unexpected expenses, many Americans will rely on their credit cards. Many, however, will also take hardship withdrawals or loans from their 401(k) accounts. Often these loans from their 401(k)s are to pay off large credit card bills. According to a survey by Transamerica, the top two reasons for hardship withdrawals were medical expenses and to prevent home eviction.

All of this adds up. The Center for Retirement Research at Boston College found that 54 percent of low-income households will face an income gap in retirement. This is significantly higher than the 36 percent of wealthy households that will face an income gap. This raises serious questions about the approach to retirement savings in the U.S., particularly the dominance of 401(k)s.