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National News
This week, two reports brought attention to the prevalent retirement crisis many Americans face, plus the 2023 Pensions Research Council Symposium sheds light on retirement inequality.
A new report by Prudential Financial reveals the unsettling truth that most Gen Xers are not prepared for retirement. According to the report, 46% of Generation X–those born between 1965 and 1980–do not feel prepared for retirement, 35% have less than $10,000 saved, and 18 % have no retirement savings at all. This group–now in their late 40s to mid-50s–has been burdened by student loan debt, caring for aging parents, the financial challenges of raising children, and most recently, the pandemic, which concerned 54% of Generation Xers about their ability to achieve a financially secure retirement following the downturn, according to a 2021 NIRS report. Read more on the report’s findings here.
On a similar note, a recent survey conducted by unbiased.com reveals that only 30% of Americans feel confident about the retirement offerings available to them. The study highlights a lack of knowledge and understanding about retirement options, with many participants citing confusion and not knowing where to start as key factors. Many participants also noted that their concerns about inflation and healthcare were the main drivers of anxiety about retirement planning. As NPPC has covered before, retirement is expensive and requires extensive planning and saving. Equipping employees with adequate tools to help them succeed in retirement is essential. Read more about the findings here.
Black and Hispanic Americans face greater challenges in achieving financial preparedness for retirement than their white counterparts. The 2023 Pensions Research Council Symposium explored the underlying causes of this retirement inequality and proposed potential policy reforms. Factors such as disparities in homeownership and the decline of defined benefit (DB) pensions contribute to the wealth gap. According to Harvard University professors Karen Dynan and Doug Elmendorf, many middle and upper-income families with heads in their 50s experience retirement-income replacement rates below 60%, especially black households. “The challenge of receiving adequate income in retirement is especially acute for many families with Black heads,” they stated in their conference presentation on Changes in Racial Gaps in Retirement Security over Time. “One might hope that families without DB pensions would save more themselves, but that is not the case,” they note. “The challenge of receiving adequate income in retirement is especially acute for many families with Black heads, as Black-headed families … are notably less likely to have defined benefit pensions.” Read more on the presentation here.
Be sure to check back next Friday for the latest in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.
